9911796707
TMI Blog1997 (12) TMI 426X X X X Extracts X X X X X X X X Extracts X X X X ..... declared by them under Rule 192 during the period 15-3-1989 to 16-9-1993. It was also found that they had not furnished satisfactory account of the said quantity of cut tobacco as having been used for the declared purpose or in any other manner. 3. By Show Cause Notice dated 9-1-1994 Collector alleged that the Appellants had failed to use the cut tobacco in the manufacture of rolled cigarettes as declared by them under Rule 192; that they had failed to furnish satisfactory account of 39,780 kgs. of cut tobacco as having been used for the declared purpose; that they had failed to satisfy the proper office about its use or about its having been lost or destroyed by natural causes or unavoidable accident during handling/storage and that they had manipulated their Appendix-E Register by describing the said quantity of cut tobacco as `wet scrap . SCN relied on the statement given by the Director of the Appellant Co. on 20-9-1993. 4. In reply the Appellants contested the charges on the grounds of limitation and on merits. They contended that the cut tobacco on which duty had been raised and for which non-accountal had been alleged was in fact `wet scrap which arose during the slitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et scrap without any intimation to or permission of the proper officer as required under Chapter X. As regards the contention raised by the appellants about time bar, Commissioner observed that as far as demand of duty under Rule 196 is concerned there is no warrant for importing the period of limitation under Section 11A. He relied on the Tribunal decisions reported in 1989 (42) E.L.T. 686, 1989 (41) E.L.T. 474, 1985 (22) E.L.T. 297 and 1984 (17) E.L.T. 205 in support. As regards the plea of the appellants that since their unit was under physical control the Department was fully aware of production of wet scrap in Appendix `E , the Commissioner found that the appellants had not shown any disposal of such wet scrap. He also rejected the appellants reliance on Siemens Ltd. v. CCE [1994 (70) E.L.T. 305 (Tribunal)] in support of their claim that demand under Rule 196 was subject to the limitation under Section 11A. Commissioner observed that a perusal of the said decision would indicate that no such finding had been given by the Tribunal. Relying on the Tribunal decision in Ashok Leyland v. CCE [1989 (44) E.L.T. 343] he held that since Rule 196 had provisions for breach of the rules ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 96 nor can there be any allegation of cut tobacco having not been used for the purposes mentioned in the application under Rule 192. Since the entire cut tobacco had been utilised it could also not be suggested that any quantity of cut tobacco had become surplus within the meaning of Rule 196A. Since particulars relating to disposal of waste arising in the course of manufacture of cigarettes is recorded in Form Appendix E the provisions of Rule 195 dealing with disposal of waste has also been satisfied. Explaining the process of recovery of tobacco from waste cigarettes through the `wet line slitting process, ld. Counsel stated that for obtaining higher recovery of tobacco from waste cigarettes they have to be opened and slit before which the waste cigarettes are sprinkled with water after putting them on the conveyor band. However, a small quantity of tobacco get stuck on the band which has to be scrapped off as the wet tobacco cannot be used further and has to be thrown away. When the officers visited the factory on 20-9-1993 and when objection was taken with regard to wet scrap, permission was sought for throwing away such scrap which was not given in spite of repeated correspo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rap to the officers at the time of inspection. The Commissioners order confirming the duty demand on the unaccounted cut tobacco and the forfeiture of security deposit under Rule 196 and imposition of penalty under Rules 209, 210 and 226 was therefore, according to the SDR, fully justified and in accordance with law and called for no interference. He pleaded for the rejection of the Appeal. 7. We have carefully considered the above submissions and perused the file. The Appellants main contention is that they had maintained the cigarette manufacturing account as prescribed in Appendix B giving details of cut tobacco received for manufacture of cigarettes which was duly authenticated by the Central Excise Officer on daily basis. They had also filed monthly returns under RT 5 Form giving details of the tobacco received, issued for manufacture and waste. They had also been maintaining Appendix C giving account of utilisation of cut tobacco. There was no allegation that these details had not been properly recorded. Their case is that in such a situation Rule 196 cannot be invoked for demanding duty. Further appellants have also claimed that they had been recording the `wet scrap o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
