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TMI Blog1996 (12) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... o the tune of Rs. One lakh. In their appeal BAB has prayed for the quashing of the said order. In the cross objection dated 7-12-1990 filed by the Assistant Collector, U.P. Central Excise Collectorate, Allahabad, the Assistant Collector has prayed for the confirmation of the demand and penalty and rejection of BAB's appeal. In Appeal No. E/4390/92-C filed by Collector, Central Excise, Allahabad the Collector has prayed for the quashing of the Order-in-Appeal No. 112-C.E./ALLD/92, dated 29-5-1992 passed by the Collector (Appeals), Central Excise, Allahabad by which the Collector (Appeals) had held BAB eligible for exemption during the material period under Notification No. 179/77, dated 18-6-1977. In the cross objection filed by BAB, being E/CO/387/94-C, BAB has prayed for the upholding of Collector (Appeals) order and rejection of the Department's appeal. 2. Since both the appeals raised common points they were heard together and are being disposed of by this common order. 3. For BAB, Shri L.P. Asthana, Advocate argued the case. For the Collector, Shri Sanjeev Sachdeva, SDR appeared. 4. By a show cause notice (SCN) dated 27-7-1987 issued by the Collector, Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring BAB to produce documents in regard to production of 'Dant Manjan Lal' for the period 1980-81 to 1985-86. On 17-2-1986 Preventive Officers of the jurisdictional Range visited BAB's factory and recorded a statement from its General Manager in which the General Manager admitted to the existence of stock of Dant Manjan Lal valued at Rs. 5,18,949 in the factory but claimed that the same was an Ayurvedic Medicine manufactured under licence granted by Ayurvedic Drugs Controller, Govt. of U.P. BAB could not however produce any authentic proof of the product being an Ayurvedic Medicine. The officers therefore came to the conclusion that the product was an item of dentifrice falling under T.I. 68. They therefore seized the whole of the stock under the relevant provisions of the Act and Rules on the reasonable belief that the said Dant Manjan Lal had been manufactured without a central excise licence and in contravention of the law. BAB was thereafter asked to produce the records for their past production and the quantum of their illegal transactions. 6. BAB in the meantime obtained a stay order from the Allahabad High Court against the summons order issued by the Superintendent o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espect of Dant Manjan Lal and demanded duty thereon; that the Allahabad High Court had by its order dated 28-5-1986 quashed the order passed by the Assistant Collector as a result of which all actions taken pursuant to the Assistant Collector's order stood quashed; that the CEGAT orders dated 7-6-1986 in the case of M/s. Baidyanath Ayurved Bhawan Ltd., Patna v. C.C.E., Patna and order dated 10-7-1986 in the case of Baidyanath Ayurved Bhawan, Nagpur v. C.C.E., Nagpur have not reached finality as these orders had been challenged before the Supreme Court; that research and analyses on several patients conducted at Bundelkhand Ayurvedic College, Jhansi had proved that Dant Manjan Lal was efficacious in several mouth had teeth diseases; that the raw material used for manufacture of Dant Manjan Lal are Booties which had Ayurvedic value and were Ayurvedic medicines; that affidavits sworn by Vaidyas had opined that Dant Manjan Lal were found to be having preventive as well as curative properties in several gum and teeth diseases; that the Collector Central Excise, Calcutta by Order dated 31-1-1983 had held that Dant Manjan Lal was an Ayurvedic medicine; that Dant Majan Lal, being a drug us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hawan, Naini, Allahabad held that Dant Manjan Lal was classifiable under T.I. 68 and not as a drug or Ayurvedic Medicine and therefore not entitled to exemption under Notification No. 55/75 as amended. Since none of the said orders had been reversed by any higher authority the said orders were binding. 11. As regards inclusion of "San Sangrah" by Notification No. 441/87, dated 28-8-1987 did not by itself prove that Dant Manjan Lal is a drug or Ayurvedic Medicine. 12. On the question of use of power in the manufacture of Dant Manjan Lal, Collector noted that BAB had admitted that power operated grinding medicines were used for grinding raw material/ingredients for products other than Dant Manjan Lal in the factory during the material period. Collector also relied on the statement given on 8-8-1986 by Shri Sadanand Mishra, in-charge of Jadi-booti section of the factory to prove that ingredients for Dant Manjan Lal were ground in the power-driven grinding machines installed in the factory and power was also used in the sealing of Dant Manjan Lal. Shri Sadanand Mishra had also stated that registers called "Nirman Register" were being maintained to account for ingredients ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entral Excise licence and to file classification list and price list containing the relevant information/facts regarding the products namely, Dant Manjan Lal, in spite of the Superintendent's directions to the Central Excise Department constituted suppression of facts. He therfore held that BAB had failed to observed the provisions of the Act and Rules inasmuch as they did not take out a Central Excise license which constituted the contravention of Section 6 of the Act and Rule 174 of the Rules. Inasmuch as they removed Dant Manjan Lal from their factory without payment of excise thereon, they had failed to comply with the provisions of Rules 9(1) and Rule 173-F. Inasmuch as they failed to file classification lists and price lists and to maintain the prescribed records and prescribed procedure, they had contravened Rules 173-B, 173-C, 173-G and 226 of the Rules. The Collector therefore held that it was abundantly clear that non payment of duty was by reason of wilful misstatement and contravention of the provisions of the Act and of the Rules made thereunder with intent to evade payment of duty. 14. As regards the value of clearances to the tune of Rs.1,83,60,102.71 on which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alf of the parties. We have also heard the DR 17. On the question of time bar, it is not in dispute that the show cause notice dated 27-8-1987 referred to a period between 28-8-1982 and 28-2-1986. BAB has contended that the allegations of suppression and contravention of provisions of the Act and the Rules have not been proved for justifying the invoking of the extended period of limitation under Section 11A. They have relied on a number of decisions given by the Supreme Court and the Tribunal. It has been contended on the basis of the Supreme Court decision in Cosmic Dye Chemicals v. C.C.E., 1995 (75) E.L.T.721 as well as on the basis of C.C.E. v. H.M.M. - 1995 (76) E.L.T. 497 and others that the misstatement or suppression of facts must be wilful and the show cause notice should specifically allege wilful misstatement, suppression etc. We observe that the Collector has gone into this question fully in the impugned order. It is an admitted fact that BAB had not during the relevant period taken L-4 licence in spite of the department consistently pressing them to do so. It is also not in dispute that BAB had removed their product Dant Manjan Lal from their factory without paym ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the SCN, we find that though the SCN does not make a specific reference to non production of Nirman Register as evidence of suppression, the SCN specifically refers to the dilatory tactics adopted by BAB in submitting figures relating to manufacture and clearance of Dant Manjan Lal and also to furnish records and documents for the period 1980-81 onwards. Nirman Register was an important and relevant document regarding the manufacture of their product. One of their responsible employees had, in his statement dated 8-8-1986 admitted to the existence of the said Register. Failure to furnish the same to the jurisdictional officers when it was demanded as part of records and documents in respect of the manufacture of their product would, in our opinion, amount to suppression and we hold that the same was covered by the SCN issued on 27-7-1987. 19.1 On the question of eligibility for exemption under Notification No. 179/76-CE, there are contradictory findings in the orders given by Collector (Appeals) dated 21-9-1990 (impugned order in Appeal No. E/3472/90-C) and the order given by Collector (Appeals) dated 10-6-1992 (impugned order in Revenue Appeal No. 4390/92-C). In the order dated 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... showing the use of power by BAB during the relevant period for the manufacture of Dant Manjan Lal, it is seen from paragraph 5 of BAB's cross objection in A. No. E/4390/92-C that power-driven sealing machines had been installed in their premises. The said machine, according to BAB, was being used initially for sealing containers of "Chawanprash" manufactured by them but later on when they converted tin packing to plastic packing for "Chawanprash", the sealing machines had become surplus and therefore it was used for sealing containers of Dant Manjan Lal after June, 1986 when they had already started paying duty from March, 1986. 19.4. In this context it is noticed that there is no dispute as to the fact that BAB had refused to take L-4 licence in spite of written direction given to them by the Superintendent as early as on 9-7-1981. They had also refused to give notice to the Collector under Rule 43(1) specifying the nature of the raw materials intended to be used in the manufacture of the excisable goods. BAB's claim had always been that Dant Manjan Lal, being an Ayurvedic medicine preparation, was not excisable goods and did not fall within T.I.68. The Supreme Court had fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by BAB during the period in question. Their non-compliance with the provisions of Rules 173-B, 173-C, 173-F and 173-G also assumes significance in this context as the submissions of the relevant lists would have revealed the true position at the relevant period. BAB therefore cannot take advantage of their own actions of non-compliance of the legal provisions to claim the benefits of exemption Notification No.179/77. It is the settled position that it is for the assessee claiming the benefit of an exemption notification to prove the facts that entitles him to the exemption [see Mysore Metal Industries v. Collector of Customs - 1988 (36) E.L.T. 369 (S.C.); Santram Paper Mills v. Collector of Central Excise - 1989 (42) E.L.T. 642 (T)]. The onus was clearly on the BAB, and in the absence of documents which would have proved the non-use of power, makes their claim unsubstantiated. In Varadalakshmi Mills v. Assistant Collector of Central Excise - 1981 ECR 265 the Madras High Court held that when an assessee fails to let in necessary material to enable them to qualify either for exemption or for a lower rate of duty they cannot be heard to say that the Department should have taken perio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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