9911796707
TMI Blog2001 (7) TMI 532X X X X Extracts X X X X X X X X Extracts X X X X ..... well as un-branded. The appellant s factory was visited by the Central Excise Officers on 8-3-1996 and various checks and verification were conducted. On physical stock verification of final product as also principal raw materials i.e. tobacco powder, the same were found to be 7801.8 kgs. and 13,870 kgs. respectively. It was noticed by the Officers that the quantity of tobacco powder as entered in their raw material account i.e. Form IV was 60,300 kgs.. The statement of Shri Radhey Shyam Sharma who looks after the Excise matter of the appellant was recorded. In the said statement, he admitted the shortage of tobacco powder and contended that the same was on account of handling and transportation loss. As regards the final product, he explained that a quantity of 5157.522 kgs. of Gudakhu was manufactured by them on 8-3-1996 itself i.e. the day of visit of Officers. He also gave ratio of the tobacco powder required for manufacture of Gudakhu as 600 gms. for 3 kgs. of Gudakhu. 2.2 During the post seizure investigation, Shri Sanjeev Kauntia son of Shri Om Prakash Kauntia, proprietor of the appellant s unit appeared before the officer on 30-4-1996, when his statement was recorded. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 8-10-1995 to M/s. Sona Tobacco Company. The said quantity was received back by them during the period 11-3-1996 to 23-5-1996 and a payment of Rs. 7500/- was also made by them to M/s. Sona Tobacco Company against their cash memo dated 23-5-1996 towards screening charges. The appellants also contended that merely on the basis of shortage of principal raw material, no findings of clandestine manufacture and removal of final product can be arrived at against them, without showing the receipt and utilisation of other raw materials. In support of their submissions, they placed on record a number of decisions of the Tribunal. The appellants also contended that a quantity of 5157.522 kgs. of Gudakhu was manufactured by them on 8-3-1996 itself. They also contended that in any case the duty has not been calculated correctly inasmuch as the rate of duty prior to 23-7-1997 was 15% whereas the show-cause notice has calculated the demand by applying the rate of duty at the ratio of 40% basic and 10% additional excise duty. 2.5 The show-cause notice was adjudicated by the Commissioner vide his impugned order rejecting the appellants contention. However, he accepted the appellants stand t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty has been confirmed against the appellants on the ground that they have manufactured and clandestinely removed a quantity of 517150 kgs. of Gudakhu without accountal in their books and account and without payment of duty during the period 1995-96 and 1996-97. The said quantity of Gudakhu is alleged to have been manufactured out of total quantity of 103430 kgs. of tobacco powder, principal raw materials used in the manufacture of Gudakhu. The receipt of the above quantum of tobacco powder by the appellants is based upon the physical verification made by the visiting Central Excise Officer in the appellants factory on 8-3-1996 as also on the investigation made by the Revenue with the supplier of the tobacco powder. The appellants have taken a stand that mere shortage of raw material, by itself cannot be made the basis for arriving at the findings of the clandestine removal. While there can be no quarrel about the legal position but each and every case has to be decided on the basis of the facts involved in that particular case. It is seen that in the present case, while explaining shortage of the main raw materials, the appellants have been shifting their stand right from the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain shifted their stand and submitted that they had sent 38.340 MT of tobacco dust to one M/s. Sona Tobacco Company for screening. I find that the above contention of the appellants has been countered by the adjudicating authority very effectively when he observed that apart from the fact that it is the third stand taken by the appellants, no entries were found in the raw materials register reflecting removal of tobacco dust to M/s. Sona Tobacco Company and as such the same remains un-substantiated. Further, the assessees have failed to explain as to how such substantial quantity of principal raw material sent in October, 1995 was not received back after screening within a reasonable time. Further, the same was received after the visit of the officers and the payment of M/s. Sona Tobacco Company was also made after the detection of the case. In any case, the factum of having sent the raw materials to M/s. Sona Tobacco Company was not made known to the visiting staff to the Department at any point thereafter during investigation proceedings. In these circumstances, the adjudicating authority has rightly rejected the appellants plea without any element of credibility. I find that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. 9. The appellants have also contended before me that presuming that the tobacco powder was received by them in excess of their recorded entries in raw material accounts register, there is nothing to show that the same was used in the manufacture of branded gudakhu instead of un-branded gudakhu. It is observed that there can be no motive for the appellants not to enter raw material in their accounts for manufacture of un-branded gudakhu inasmuch as unbranded gudakhu attributed nil rate of duty. In view of the admitted position of having received tobacco powder in excess recorded entries, the inevitable conclusion flowing from the same can only be made that the same has been used in the manufacture of dutiable goods. The failure of the Revenue to establish the receipt of the other materials will not demolish the revenue s case in view of the appellants failure to explain the utilisation of admittedly excess received tobacco powder. Not only that their attempt to counter the allegations by changing their stand on different points of time reflected upon the illegal activities of the appellants. In these circumstances, I am of the view that the Revenue in this case has discharged ..... X X X X Extracts X X X X X X X X Extracts X X X X
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