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TMI Blog2010 (6) TMI 577X X X X Extracts X X X X X X X X Extracts X X X X ..... 28-2-2006 of unit no. II does not indicate that the appellant had cleared sample pouches filled with the protein mix beverages - It is also seen from the records that the invoice dated 28-2-2006 is for a period, which is subsequent to the period in dispute before us. i.e. period in dispute before us is 2004-05, 2005-06 (upto January, 2006) - Decided in favor of the assessee - E/687/2007 - 1322/2010 - Dated:- 30-6-2010 - Shri M.V. Ravindran, P. Karthikeyan, JJ. REPRESENTED BY : Shri M.S. Srinivasa, Advocate, for the Appellant. Shri M. Vivekanandan, SDR, for the Respondent. [Order per : M.V. Ravindran, Member (J)]. This appeal is directed against the Order-in-Original No. 32/2007, dated 27-8-2007/6-9-2007. 2. The relevant facts that arise for consideration are the appellant herein is a proprietary concern engaged in the manufacture of dietary supplements and protein beverages falling under Chapters 19 and 21 of the Schedule to the Central Excise Tariff Act, 1985 in their factory (Unit-II) at Arekere, Bannerghatta Main Road, Bangalore-78. The appellant has also two more units i.e. Unit-I is situated at J.P. Nagar and Unit No. III is situated adjacent to Unit- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Adjudicating Authority, after following the Principles of Natural Justice, did not agree with the contentions raised by the appellants and confirmed the demands and also imposed penalties and sought for the interest under the provisions of Section 11AB and also confiscated the packing materials. Capital Goods, which were seized from the premises of unit No. III of the appellant. Aggrieved by such an order, the appellants came before the Tribunal. 3. The learned Counsel appearing on behalf of the appellant herein submits as under :- I. Demand of the duty on clearance of bulk from unit-II to unit-I not sustainable :- (a) Working of the disputed unit of the appellant was explained by the learned Counsel in diagrammatic manner. It is his submission that the demand has been confirmed on the basis of certain entries made by security personnel without any corroborative evidence. It is his submission that the Department had conducted simultaneous investigations at Unit-I also but, no evidence or any show-cause notice was issued to support the theory that the bulk mix produced and cleared by the appellant to unit-I was consumed by Unit-I and the sample packets and the sachets ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as credit to unit-I and hence the exercise, which has been done by the Revenue, would be a revenue neutral exercise. He would rely upon the following case-laws for this submission. (i) CCE v. Jamshedpur Beverages - 2007 (214) E.L.T. 321 (S.C.) (ii) CCE v. Coca Cola India - 2007 (213) E.L.T. 490 (S.C.) (iii) RAD-MRO Manufacturing Pvt. Ltd. v. CCE, Bangalore - Final Order No. 730/2010, dated 8-4-2010 [2010 (258) E.L.T. 235 (T)]. (iv) CCE v. BPL Sanyo Utilities Appliances - 2004 (177) E.L.T. 722 (v) Gopal Zarda Udyog v. Commissioner - 2001 (128) E.L.T. 409 (c) Alternatively, the learned Counsel would submit that they have paid the duty on the bulk cleared from the unit-II to unit-I by applying pro-rata MRP of the unit container, instead of adopting cost construction method in terms of Board s Circular No. 643/34/2002-CX., dated 1-7-2002. It is his submission that the bulk mix cleared from the appellant s unit-II to unit-I cannot be assessed either on MRP or on pro-rata MRP basis, as it is not a pre-packaged commodity and hence the valuation or the assessable value has to be ascertained as per the provisions of Section 4 read with Valuation Rules ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the arithmetic therein is not matching. It is his submission that there is duplication of clearances, then the quantity on which demands raised should have been, more or less, equal or double the quantity of goods shown to have been cleared on payment of duty. It is his submission that the sums or the quantity cleared do not match. It is his submission that the appellant has been unable to explain entries in the outward register maintained by the security at the factory gate. It is his submission that the defence of the assessee that the security is purely a private register maintained by security personnel is unacceptable. He would submit that in any clandestine manufacture and removal, there is difficulty to attain mathematic precision in investigation. For this proposition, he would rely upon the judgment of the Hon ble Supreme Court in Collector of Customs v. D. Bhoormull - 1983 (13) E.L.T. 1546 (S.C.). 4.1 As regards the valuation of the goods of removal, it is his submission that provisions of Section 4 read with Valuation Rules, 2000 will be attracted in this case and as per the law settled, every Rule has to be exhausted clearly before arriving at the Rule, which needs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... procedure; (3) That during the relevant period whether they had cleared samples of various flavours in the form of pouches without payment of duty to their unit No. I; and (4) That during the period March 2005 to February, 2006, whether they had manufactured and cleared final products, namely Xtra-Mass in unit containers without raising excise invoice and without payment of duty. (1) Clearance of bulk mix of protein beverages without payment of duty : 6. It is seen from the records that the adjudicating authority has confirmed the demand raised in the show-cause notice under this head. For confirming the demand, the adjudicating authority had relied upon entries made in the outward register maintained by the security at the factory gate and also on the ground that appellants were not able to give any explanation regarding the mismatch of the figures. He had also come to the conclusion that the appellants had not disputed entries in the security register and department is able to establish a case of clandestine removal to such degree of probability that a prudent man, on its basis, believes in the existence of the fact in issue. It is also further held by him that va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resumption is not sustainable for simple reason that if it is an admitted fact that the entire bulk mix of protein beverages are cleared to their Unit No. I, and the consumption thereto is for packing the sample pouches of the same, there had to be an investigation at Unit No. I from where the sample pouches are cleared. It is seen from the records that Revenue authorities have not even come to a tentative conclusion that Unit No. I had cleared sample pouches clandestinely, or without payment of duty. In the absence of any such conclusion or issuance of show-cause notice to unit No. I, we are constrained to hold that the investigation has failed woefully to bring the charge of clandestine removal of bulk mix from Unit No. II to Unit No. I. It is also undisputed by the lower authorities that the appellant s unit i.e. Unit No. I only has the facility for re-packing of bulk into sample pouches. If that be so, it was for the authorities to investigate and bring on record, clearances, if any, of sample packs from Unit No. I manufactured out of entire bulk mix received from Unit No. II (the appellant herein). We find that the decision cited by the learned Counsel in support of the propos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority as regards the clearance of bulk mix of protein without payment of duty are unsustainable and are liable to be set aside and we do so. (2) Clearance of Cenvat availed packing materials inputs : 7. On this allegation, the adjudicating authority has come to the conclusion that the appellant had removed the Cenvat credit availed packing materials and inputs for storage purpose in some other premises without reversing the proportionate credit as required under Rule 3(4)(b) of CENVAT Credit Rules, 2004. He has confirmed the demand based upon the finding that the information given by them to the Assistant Commissioner does not indicate keeping of packing material in additional space for storage only. 7.1 On a careful consideration of the submissions made by both sides on this point, we find that it is undisputed that the unit No. III where the duty paid packing materials and inputs were found is rented by the assessee and is in his possession as one of the premises. Provisions of CENVAT Credit Rules, 2004 clearly indicate that the duty paid materials can be removed to further processing or job working and can be brought back within 180 days and if it cannot be done so, p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch as the clearance of samples from unit no. II has not been brought on record. 8.2 As regards the findings recorded by the adjudicating authority on the Invoice No. 718 of 28-2-2006 of unit no. II on clearance on substantial quantity of sachets, we find that the said invoice does not indicate that the appellant had cleared sample pouches filled with the protein mix beverages. The said invoice only indicates clearance of sachets of samples. It is simpliciter clearance of empty sachets to the unit no. I for filling up with the protein mix beverages. It is also seen from the entire records that Revenue authorities have not recorded any statement of any person indicating that this Invoice No. 718 of 28-2-2006 was in fact clearances of sample sachets with protein beverages. The appellants have been taking a consistent plea before the adjudicating authority and before us also that the clearances, which were effected from their unit no. II, is only of empty pouches and unit no. I has only the facility to fill the sample pouches and the said facility is not available in unit no. II or unit no. III during the period of dispute. It is also seen from the records that the Proprietor, in hi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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