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TMI Blog2014 (2) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... t : Shri K K Anand, Adv. For the Respondent : Shri S K Panda, JCDR PER : Manmohan Singh These two appeal alongwith stay petitions have been filed by appellants against the Order-in-Original No.02/CE/Commr/2013 dated 30.1.2013 wherein central excise duty of Rs.4 crores has been confirmed under section 11A(1) of Central Excise Act, 1944 alongwith equivalent amount of penalty under Rule 17 of Pan Masala Packaging Machines (Capacity Determination and Collection of Duty) Rules, 2008 read with section 11AC and Rule 25 of Central Excise Rules, 2002 and ordered for recovery of interest under section 11AB. In addition penalty of Rs.50,000/- has also been impose on Shri Radhey Shyam Gupta under Rule 26 of the Rules 2. The brief facts of the case are that the officers of Kanpur Regional Unit of DGCEI found that the appellants are engaged in the evasion of Central Excise duty by way of using two pouch packing machines in the manufacturing (packing) of gutkha; the party had only filed declaration regarding installation of one nos. of FORM FILL SEAL MACHINE i.e. FFS machine in their factory premises in the month of July, 2008 and further they had not filed any declaration regardin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ator set etc. valued at Rs.5,53,655/-. No records relating to raw materials valued at Rs.7,56,790/- could be produced since no documents/records and no bills regarding purchase of such unaccounted stock of raw material, loose gutkha and semi-finished goods were produced by the appellants. The stock of the said unaccounted goods were seized by the officers on spot. 5. Shri Ashish Gupta, Supervisor of M/s.Radhy Shyam Sons in his statement confirmed that he was supervisor of M/s.Radhy Shyam Sons and looking after supervision over the labour of the unit. He also accepted that two pouch packing machines were installed in those premises where they were engaged in the manufacture of 'VIKAS' brand gutkha. 6. Statement of Shri Rajeev Gupta, proprietor of M/s.Radhy Shyam Sons was also recorded on 29.10.2009 and he signed on the panchnama, in token of his acceptance with panchnama proceedings. He also admitted that his firm engaged in the manufacture in production of 'VIKAS' brand gutkha; there were two paddle sealing machines in his registered premises; Gutkha mix masala was manually filled in pouches an sealed with the aid of these paddle sealing machines. He has not declared to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of VIKAS brand gutkha were found by the officers. Statement of Shri Vikas Agarwal was also recorded on 9.3.2010 wherein he also admitted that during the last few years, they supplied packaging materials to M/s.Radhey Shyam Sons, manufacturers of 'VIKAS' brand gutkha. He also informed that 30 rolls of lamination of 'VIKAS' brand gutkha, found from his premises on 27.2.2010 were manufactured in their unit at Shubh Multipack and have been stored in their premises for the last four month. He also confirmed that lamination rolls of Vikas brand gutkha were meant for packing of gutkha by automatic FFS machine. Since 1.7.2008, his firm has been selling printed laminated rolls to M/s.Radhey Shyam Sons on regular intervals and these consignments were sold on cash payment as per instructions of Shri Radhey Shyam Sons. 10. Enquiry conducted at the end of tobacco supplier, wherein a statement of Shri Dilip Kumar Malu, Manager of M/s.Aman Marketing was recorded on 13.11.2009, wherein he stated that he was well acquainted with the manufacturers of 'VIKAS' brand gutkha for the last four years, his firm had been selling tobacco to them on regular basis. He also confirmed that the sale of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atements of Shri Ashish Gupta and Rajeev Gupta were retracted and those were not admissible. Learned Advocate also contended that they were not manufacturing VIKAS brand gutkha at all. 15. On the other hand, Ld.DR reiterates the findings in the adjudication order. 16. We have examined the records. On perusal of the various statements and documents, it was observed that M/s.Radhey Shyam Sons were manufacturer of VIKAS brand gutkha. Rolls of VIKAS brand were found from premises of Shub Multipack who were suppliers of rolls of lamination to M/s.Radhey Shyam Sons. It has also come out on record that these rolls were specifically used for FFS machines. It also came out that that mostly cash transaction were undertaken on purchase of raw materials and packing materials. Even suppliers of tobacco admitted that they have been supplying the tobacco against cash transaction to M/s.Radhey Shyam Sons who are manufacturers of VIKAS brand gutkha. Shri Ashish Gupta, Supervisor of M/s.Radhey Shyam Sons admitted in his statement on 29.10.2009 and confirmed two pouch packing machines were installed in the unauthorized premises where M/s.Radhey Shyam Sons were manufacturing of VIKAS bra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and statements. 19. Further as per explanation to Rule 18 of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules 2008 mere installation of FFS machine engaged in production/manufacture was sufficient to establish duty liability. Rule implies that use and working condition of machines is not required. Rule 17 and 18 of Pan Masala reads as under:- 17. Penalty for Contraventions, etc. (1) Subject to the provisions of section 11AC of the Act, if any manufacturer produces or removes notified goods in contravention of any provision of these rules, then all such goods shall be liable to confiscation, and the manufacturer shall be liable to a penalty not exceeding the duty leviable on the notified goods in respect of which aforesaid contravention has been committed. (2) If it is found that goods have been cleared from a unit which is not registered with the jurisdictional Central Excise Office, then its duty liability for the period till it was not registered, shall be determined as if the goods manufactured by the unit were not eligible for levy and assessment under notification of the Government of India in the Ministry of Finance (Departme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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