9911796707
TMI Blog1995 (8) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... nder the sub-heading 8422.90 of the Schedule to the Central Excise Tariff Act, 1985 had contravened the provisions of Section 6 of the Central Excises and Salt Act, 1944 (the Act for short) read with Rule 174 of the Central Excise Rules, 1944 (the Rules for short) and also the provisions of Rule 9(1) read with Rules 173G(1), 173B, 173C, 173F, 173G(2) read with Rules 52A, 173G(4) read with Rules 53 and 226 of the Rules, inasmuch as they had manufactured and removed from their factory the `Automatic Capsule-making Machine and Parts thereof valuing Rs. 57,49,310.00 during the year, 1987-88 without payment of the duty in this regard. 3. The case of the Department is that on the basis of an intelligence collected and developed by the officers of Centralised Preventive Organisation, Calcutta-I Collectorate, that the said Firm had removed such Machine without payment of duty, they conducted simultaneous searches at the factory as well as the residential premises of the appellant firm and the partner, Shri Varghese also the appellant herein. The searches resulted in the recovey and seizure of altogether 35 (thirty-five) records and documents. They also found an Agreement made on Ist Aug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dasgupta, Ld. Consultant contended before us that there is absolutely no evidence to show that the appellant firm had manufactured the machines in question during the year, 1987-88 and removed the same. In this connection, he pointed out that the appellant firm was only dealing in trading activities and they were purchasing the parts from the open market and were supplying the same. He pointed out that the appellant firm is only a SSI Unit and in this connection, he drew our attention to Annexure B which is the certificate of registration. That certificate was dated 14-11-1983 and the manufacturing activity mentioned therein was for production-cum-processing of components for capsule-making machines, machinery spares and gears. He, further, stated that this certificate was further amended on 13-9-1989 and it was in that amended certificate they have mentioned that the appellant firm s activity is assembling of automatic capsule-making machine. He pointed out that the learned Collector had observed that in the year, 1983 itself they had obtained the certificate for assembling of automatic capsule-making machine; but it is not a correct statement of fact and he has misread the certi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty. He also pointed out that the machine was correctly classified under Heading No. 8422.00 and thus he stated that the order passed by the adjudicating authority is in accordance with law. He also relied upon the other obsevations in the order and stated that the appeals may be dismissed. 6. We have considered the submissions of both sides. The point for determination is whether the Department has proved that the appellant firm has removed the capsule-making machine during the period, 1987-88 without payment of duty in this regard. In order to prove the same the Department has also to show that such a machine was manufactured by the appellant firm and the same was removed. The first document relied upon by the Department is the agreement executed by the appellants as well as M/s. Medicaps. The case of the appellant firm is that this agreement could not be complied with and they did not supply any machine during the year, 1987-88. 7. Learned Adjudicating Authority has placed much reliance on the fact that the appellant firm had obtained a certificate in the year, 1983 for the assembling of automatic capsule-making machines and in view of this certificate they were producing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the copy of the order dated 4-4-1984 was not supplied to the appellant firm and there was no mention in the show cause notice to that effect. There is also no mention about this aspect in the whole of the adjudication order. This material document which should have been taken into account by the adjudicating authority was not dealt with by him and he has also not applied his mind in this regard. In order to show that there was an unauthorised removal, the burden is cast on the Department. The Department should have also taken into account all the documents which it had recovered during the course of enquiry. Therefore, the order dated 4-4-1984 which was admittedly produced by the Managing Director, Shri Mittal should have been looked into and there is no discussion in the order as to why the same is left out. The case of the Department should stand on its own strength and not by the evidence furnished by the appellants. 12. It is now seen that the appellants in paras 8 and 9 of their reply have stated as follows :- Para 8. In support of the above contention and as against the charge for manufacture and removal of goods valued at Rs. 57,49,310.00 [Para 1(i) of the show cause n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lication of mind before issuance of the show cause notice inasmuch as even proper care for classification of the goods involved has not been taken by the departmental officers. The goods have been classified at para 1 of the show cause notice as falling under sub-heading No. 8422.90. A simple reading of the Heading No. 84.22 would reveal that the said headng relates to MACHINERY FOR FILLING, CLOSING, SEALING, CAPSULING OR LABELLING BOTTLES whereas capsule-making machine is meant for manufacturing empty capsules for medicines. This particular argument of the appellants was not at all dealt with by the adjudicating authority. On the contrary in para 8.6 of the impugned order by applying the decision in the case of Narne Tulaman Manufacturer Pvt. Ltd. v. C.C.E. reported in 1988 (38) E.L.T. 566 which was followed by another Supreme Court decision reported in 1977 (1) E.L.T. (J 199) (SC) = 1963 (Supplement I) SCR 586 in the case of U.O.I. v. Delhi Cloth and General Mills, the adjudicating authority has simply rejected the arguments of the appellants. But he has no specifically discussed the points urged by the appellants. The burden is now on the Department to prove that a particular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bar set on turn key basis at the factory at Pithampur in District - Dhar (MP) mentioning specifically therein that Central Sales-tax, Central Excise duty extra as applicable at the time of delivery. The fact that the said concern deliberately refrained from explaining this point, shows, the culpability of their mind and that they were aware that Central Excise duty was payable on the complete machine as otherwise the fact that Central Excise duty extra as applicable at the time of delivery would not have been mentioned either in the agreement dated 1-8-1983 or in the proforma invoice. Therefore, knowing fully well, the leviability of duty on the machine, they deliberately avoided the payment of such duties. 16. A perusal of this order shows that the learned adjudicating authority has held against the appellants on the ground that the appellants refrained from explaining the point as to why they had submitted the quotation dated 21-7-1983 and then it was known to them that they were not in a position to manufacture the goods. That may be a circumstance against the plea of the appellants. But the S.S.I. certificate produced by the appellants goes to show that it was only in 1989 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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