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TMI Blog2005 (8) TMI 540X X X X Extracts X X X X X X X X Extracts X X X X ..... seized by the investigating officers of Central Excise was confiscated under Rule 25 of the Central Excise Rules, 2001, with option for redemption against payment of a fine of Rs. 2.36 lakhs. As the goods had already been provisionally released, the fine was ordered to be appropriated from the cash security/bank guarantee furnished by the parties concerned. The vehicle found to have been used for transporting a part of the above goods was also confiscated with option for redemption against payment of a fine of Rs. 62,500/-. As it had already been provisionaly released, the fine was ordered to be appropriated from the cash security/bank guarantee furnished by the party concerned. The stay applications relate to the amounts of duty and penalties. After hearing both sides on these applications, we were convinced of the need to dispose of the appeals finally. Accordingly, after noting that M/s. A. Ravindran had paid an amount of Rs.23.6 lakhs during the course of investigations, we have dispensed with the requirement of predeposit of duty and penalty amounts for the purpose of taking up the appeals for final hearing. We have examined the records and heard both sides in all the appeals. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of duty by them during the period April 1997 to July 2001 and also proposed to impose penalty on them under Section 11AC of the Central Excise Act and under various Central Excise Rules. This notice also proposed to appropriate an amount of Rs. 23,61,930/- already paid by the party, towards the demand of duty. It also proposed penalties on other appellants. This notice invoked the extended period of limitation. The appellants, in their replies to Show Cause Notices, denied the allegations leveled against them. They also cross-examined several of the witnesses, whose statements had been recorded by DGCEI and relied on in the show cause notices. They also adduced documentary evidences to rebut some of the allegations raised in the Show cause notices. The adjudicating authority heard the Counsel for the appellants and passed the impugned order. 3. Ld. Counsel for the appellants submitted that the Commissioner's Order was liable to be set aside on the ground of non-application of mind and claimed that the order was erroneous on numerous counts. The finding of clandestine manufacture of branded chewing tobacco, against M/s. A. Ravindran, resulted from erroneous finding of unaccounted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e raw tobacco procured by them from Andhra region were entirely used by M/s. A. Ravindran for manufacture of Pasu -Brand Chewing Tobacco. All the demand drafts were not obtained by Shri A. Ravindran's family. This apart, demand draft details were available only for a period of 1 years. These aspects were not duly examined by the Commissioner. Referring to the Commissioner's finding that 74,670 Kgs. of raw tobacco had been clandestinely procured by M/s. A. Ravindran from Vedaranyam, Ld. Counsel submitted that this finding was not supported by any documentary evidence and was based only on statements of persons who had allegedly supplied the raw material. Yet another basis for the finding of clandestine manufacture of branded chewing tobacco was the Commissioner's finding that polybags [packing material] were procured, without accountal, by M/s. A. Ravindran, Ld. Counsel submitted that this finding was also not supported by any documentary evidence and was based only on statements of suppliers. These suppliers retracted the statements, when cross-examined before the adjudicating authority. The retractions were rejected by the Commissioner without any valid reason. With reference to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rocurement is based on statements recorded from Shri Sivaganesh Kumar and other suppliers, who are only witnesses in the case. These witnesses, at the time of cross-examination before the adjudicating authority, retracted their statements. But such retractions have been discarded as afterthoughts. It appears that, before the adjudicating authority, the Counsel argued that the retraction, by a witness during his cross-examination of his earlier statement given to investigators could not be rejected as afterthought in as much as the cross-examination was his first opportunity to retract the earlier statement. Ld. Commissioner did not look into the merits of this argument. He should have applied his mind to the point made by the Counsel. Thus the Counsel is right when he says that the finding of clandestine manufacture and removal of branded chewing tobacco by M/s. A. Ravindran during the subject period has resulted from non-application of mind by the adjudicating authority. There is no documentary evidence of supply of raw tobacco by many of the suppliers cited by the department for a substantial part of the period of dispute. The finding of unaccounted procurement, by M/s. A. Ravind ..... X X X X Extracts X X X X X X X X Extracts X X X X
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