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TMI Blog2008 (10) TMI 519X X X X Extracts X X X X X X X X Extracts X X X X ..... n of interest and imposition of penalty of identical amount against M/s. Chandan Tobacco Co., who are manufacturer of Gutkha, on the allegations and finding of clandestine removal. In addition, penalty of Rs. 25 lakhs has been imposed upon Shri S.H. Chhajed, Proprietor of M/s. Chandan Tobacco Co., penalty of Rs. 2 lakhs each on other applicant-appellants. 2. At the outset, it may be taken note that the appellant M/s. Chandan Tobacco Co. have already paid an amount of Rs. 4,47,525/- towards duty during investigations. After hearing both sides and after going through the impugned order, we find that the demand has been confirmed against the appellant M/s. Chandan Tobacco Co. for the period November 2002 to December 2005. The said demand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duction shown in their RG-1." "However, the analysis report of SIIR Delhi reflects the contents of Menthol @ 0.4% by mass in the Gutkha but do not reflect any other ingredients claimed to have been contained in such Gutkha compound purchased and used by them. Therefore, inference in this regard can be drawn that the Gutkha compound might be containing certain percentage of menthol which is reflected during the analysis of sample of Gutkha in question." "The party"s contention that there is a variance in consumption of Supari in each Lot seems to be correct, however this negligible variation cannot account for overstated consumption of quantity of Supari. The demand is based on scientifically based calculation." "From the records of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessee." "I am not agree with contention of the assessee regarding the production capacity of machines. The per month production of Gutkha pouches have been worked out in a scientific and systematic method. I find that the Department has taken a very conservative figure of 50 pouches per minutes as against the declared speed of 65 pouches. On the basis of which production of pouches per month has been worked out as under: No. of Machines × Pouches per Minutes 60 Minutes of Hour × 8 Hours Shift × 25 days i.e. 82 × 50 × 60 × 25 =4,92,00,000 pouches per month. Keeping in view the above production of pouches per month, the assessee would have produced 59,04,00,000 pouches during the year 2003-04 (up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the immediate clearances, for which the appellants have already deposited amount of Rs. 4,47,525/-. As such, we agree with the learned advocate that raising demand of duty for the past period based upon the test report of the sample from a particular lot is not in accordance with the settled proposition of law that the test report of one particular lot can be made applicable to that lot only and not to the previous clearances. We also find favour with the appellant's contention that observations made by the Commissioner are in the nature of facit approval of the appellant's plea that there is variance in consumption of supari in each lot and negligible variation in content shown in the test report and as declared by the appellant cannot i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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