9911796707
TMI Blog1996 (10) TMI 206X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise duty amounting to Rs. 4,60,317.33 (Rupees four lakhs sixty thousand three hundred seventeen and paise thirty three only) against M/s. Amar Products, Kanpur, under Rule 9(2) of the Central Excise Rules, 1944, read with Section 11A of the Central Excises and Salt Act, 1944. The dues adjudged shall be paid forthwith. 2. The facts of the case, in brief, are that the appellants are engaged in the manufacture of a product which they described as `flavoured pan masala . Intelligence was collected that it was actually edible preparation not elsewhere specified and not pan masala. A search of the factory premises of the appellants firm was conducted on 13-2-1990 by the Central Excise Officers. During the course of search, they recovered 22.600 unit containers of different packing packed in 59 cartons and described as `Kashmiri Sugandh . On reasonable belief that the goods are liable to confiscation, the goods were seized. The representative samples were drawn. The appellants were asked to furnish the figures of clearance for the period from 1986-87 and 1989-90 upto 12-2-1990. A show cause notice was issued to the appellants on 24-7-1990 alleging that the manufactured the goods des ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue number one is whether there was a reasonable belief to effect the seizure and to confiscate the goods subsequently. The second issue was whether the product contained betelnut or not and the third issue was whether the demand was time-barred. 6. So far as reasonable belief is concerned, we find that there was intelligence; that the appellants were manufacturing the product which did not contain betelnut and was liable to pay duty. When the officers, in pursuance of this intelligence visited the factory, they actually found certain product and labels affixed to the containers did not show that the product contained betel-nut. It was therefore, reasonable for the officers to seize the goods. We do not find any legal infirmity in this reasonable belief. We therefore, hold that it was reasonable for the officers to seize the goods. 7. On the second issue that the product did not contain betelnut, we find that a lot of arguments were adduced by the appellants stating that the product was known in the market as pan masala and pleaded that had an expert trade opinion been obtained, the trade would have testified to the fact that the product is known as pan masala in the trade an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f time is not applicable in the instant case. 9. In view of the above findings, the impugned order is upheld and the appeal is rejected. Sd/- (G.R. Sharma) Member (T) Dated 9-2-1996 10. [Order per : G.P. Agarwal, Member (J)]. - I propose to dispose of the present appeal as follows and since relevant facts have already been stated by my Ld. Brother in his proposed order I straightaway take up the issues which fall for my consideration :- 11. Regarding classification of the subject goods, namely, flavoured pan masala. The Ld. Collector has classified the flavoured pan masala under heading 2107.91 rejecting the claim of the appellants for its classification under heading 2107.90. For classifying the subject goods, namely, flavoured pan masala, the Ld. Collector has held that since there was no mention of betal nut or supari as one of the ingredients on the container it is classifiable under heading 2107.91. It was contended by the Ld. Counsel for the appellants that the samples were drawn and tested by the Chemical Examiner, who in his report has stated that presence of betelnut, katha, lime could not be detected in the absence of raw material. It may be verified by exec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the appellants advanced before her observing that no declaration regarding ingredients or flavoured pan masala was submitted on or after 1-3-1986 when the CET, 1985 came into force. The Officer was not in a position to know whether their products contained betelnut or not. Thus the appellants apparently suppressed the facts with regard to ingredients contained in their products with intent to get the goods classified differently and evade payment of duty due thereon. It was not disputed before us that the classification list was submitted by the appellants wherein they stated that they were manufacturing sugandhi masala and mentioned the same as non-excisable goods. The ld. Collector has not denied that the goods seized are not sugandhi masala and since the sugandhi masala was declared by the appellants in their classification list onus fell on the Department to prove that the said sugandhi masala was liable to duty under heading 2107.91 and for this purpose it was for the Department to ascertain the ingredients of the subject products. Instead of doing so the classification lists filed by the appellants were duly approved by the Department without any demur. Under these circum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were in fact using betelnuts in this preparation. Before the authorities, the assessees had submitted evidence in the form of several invoices under which substantial quantity of betelnuts was purchased by them at regular intervals. The learned Advocate submitted that the assessees were engaged in the manufacture of pan masala only and were not dealing in betelnuts. This evidence had not been discussed in the order of the Additional Collector. As regards the opinion of the Chemical Examiner, he submitted that it was not conclusive and could not certainly support the conclusion that the sample did not contain betelnuts because of which he had recommended executive checks. These checks had not been conducted by the officers. However, on a number of occasions, their factory had been visited by the officers of the department who were satisfied that betelnuts were used in the preparation. The learned Advocate further claimed that the fact that betelnut was not declared to be an ingredient on the packages, cannot lead to a conclusion adverse to them. He stated that a claim made in the advertisement of their product could not be used as means of classifying the product under the Central E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... katha or lime. Perhaps there were no chemical tests to determine the existence of these goods. He, therefore, suggested that their use in the products could be verified by executive checks. On a perusal of the test report, it cannot be said to be a comprehensive finding on the absence of betelnuts. On the other hand, he had detected the presence of vegetable cellulosic matter. Such cellulosic ingredients could come only from betelnuts. Thus the test report is itself suggestive of the existence of betelnuts. The appellants had at regular intervals purchased betel nuts. Before the original authority, the appellants had placed a number of bills certifying their purchase of betelnuts. There is nothing in the order to show this vital evidence was examined by the original authority. 26. The presence of this evidence coupled with the averment that they were using betelnut in manufacture and not for trading, goes to establish the appellants case that betelnuts were an ingredient in the impugned goods. The original authority s finding that the label did not contain any reference to supari as an ingredient has found mention in the finding of the Member (Technical). The relationship betwe ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
