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TMI Blog2015 (11) TMI 960X X X X Extracts X X X X X X X X Extracts X X X X ..... e No.1 could be said to have been party to the clandestine manufacture and removal of chewing tobacco using the machines found at the premises. This would also have to be examined in the context of the fact that a separate SCN has been issued to Mr. Kunal Indoria arising from the same search. The effect of the retraction of the statement made by Mr. Kunal Indoria and the requirement that there must be sufficient other evidence to corroborate the said retracted statement would also have to be examined in detailed by the CESTAT. Court would not like to express any opinion on the merits of the above contentions given the limited scope of the present appeal, and particularly since the CESTAT will have to deal with the appeal before it on mer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of the parties on merits. The only reasons given in the impugned order are contained in two short paras as under: 3. After careful consideration of the submission of both the sides, we find that the demand made as per rule 18 (2) of the said rules required to be rebutted by the applicant. The seizure of Machine, Packing material, Packing Machine of Products are to be explained with dear supporting evidence. This requires detailed appreciation of contention by both the sides. 4. On perusal of records and arguments we are Prima -Facie of the opinion that the applicant failed to make a case for full waiver of duty and penalties. Accordingly we order pre-deposit of ₹ 15,00,000/- (Rupees Fifteen lakhs only) within 8 (eight) w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riate Central Excise duty. On physical stock taking, the officers found packing materials valued at ₹ 2,01,500/-, raw materials valued at ₹ 1,00,650/- and finished goods valued at ₹ 95,280 in the premises. As the goods were unable to be accounted for by Mr. Kunal Indoria they were also seized. Some loose papers found in the premises were also seized. Mr. Kunal Indoria stated that the Appellant concern was registered under the Act with an address at Bihari Colony, Delhi. However, the address of the searched premises was not registered with the Department. He further is said to have informed the officers that the premises were taken on rent from one Mr. Ravinder in the last week of August, 2010. 5. The order dated 28th Fe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quality. 6. The defence of the Appellant Assessee as noted in the order-in-original of the Commissioner that there was no electricity connection and there were no motors for operating the packing machines. The further defence was that the stock of tobacco found in the premises was that which had been returned to the Appellant as defective goods. There were documents to show that these were duty clear goods that were returned. The further specific defence of the Appellant as Noticee No.1 was that (a) Noticee No.1 was not owner of the goods seized except the khaini which was out of duty paid stock and which was not in violation of law and (b) Noticee No.2 in whose possession the seized goods were found was the concerned person to show cau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the order: 114. In view of the above said admission and this being a case of clandestine manufacture, the possibility of noticee bringing in motors for the purpose of manufacturing and thereafter removing the same after completing manufacturing activity cannot be ruled out. The motors may well have been removed on day of search for repairs, replacements etc. 8. In reply, Mr. Rahul Kaushik, learned Senior Standing counsel for the Respondent, referred to Section 35 F of the Act and submitted that the Appellant had to satisfy the CESTAT, which it failed to do, that it would be subject to undue hardship on account of the order of the Commissioner. He repeatedly urged that in relation to the demand of nearly ₹ 4 crore toward ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statement made by Mr. Kunal Indoria and the requirement that there must be sufficient other evidence to corroborate the said retracted statement would also have to be examined in detailed by the CESTAT. 10. Both learned counsel relied upon the decision of the Supreme Court in Benara Valves Ltd. v. Commissioner of Central Excise (2006) 13 SCC 347. In the said decision, while explaining the true purport of the expression undue hardship occurring in the first proviso to Section 35-F of the Act, the Supreme Court observed in para 8 as under: 8.It is true that on merely establishing a prima facie case, interim order of protection should not be passed. But if on a cursory glance it appears that the demand raised has no leg to stand on, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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