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TMI Blog2016 (11) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... duty demand - I find that the two main pieces of evidences relied upon by the Revenue to raise the demand against the appellant have been successfully assailed. Consequently the demand made in the show cause notice cannot be upheld - appeal allowed - decided in favor of appellant. - Excise Appeal No. 1874 of 2009 (SM) - Final Order No. 53873/2016 - Dated:- 29-9-2016 - Shri V. Padmanabhan, Member (Technical) Shri Prashant Kumar, Advocate - for the appellant. Shri S. Nunthuk, Authorized Representative (Jt. CDR) - for the Respondent. ORDER The present appeal is directed against the order dated 31/3/09 passed by the Commissioner (Appeals), Bhopal in which the order of the lower Authorities was upheld in toto. The facts leading to the appeal are summarized below :- The appellants are manufacturers of Indian made foreign liquor (IMFL) for which molasses is the main raw-material. Besides IMFL, they also manufacture Carbon Dioxide chargeable to duty under chapter heading 2811 of the First Schedule to the Central Excise Tariff Act 1985. The appellant procured molasses from various sources. Vide Notification No.6/97-CE (NT) dated 1.3.1997, Rule 7A was introduced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y M/s. Som Distilleries, Sehatganj on the dates mentioned in the register, in the tankers whose registration number was also mentioned. This Register had been found by the Income-tax Department in the Laboratory of M/s. Som Distilleries, Sehatganj. The identical tanker numbers and corresponding dates of dispatch as seen in the records of Khandsari Units as well as the receipt shown in the Register of M/s.Som Distilleries, Sehatganj indicated that the Khandsari Sugar supplied by the Khandsari Units to M/s. Molasses Traders was actually procured by M/s. Som Distilleries, Sehatganj. Similarly, the details of the supply of molasses, produced by the other Unit, namely, M/s. Priyatam Khandsari, M/s. Shri Kabra Khandsari Sugar Mills Pvt Ltd. and M/s.Venkat Khandsari Factory also showed the sales of khandsari molasses to M/s. Molasses Traders, Bhopal which appeared to be a fake firm created by the appellant and it appeared that these khandsari Units had also supplied molasses to the appellant. During raid conducted by the Income Tax Department on the residential premises of Shri Ravi Dang, certain incriminating documents were recovered from his place. His statement was recorded on 21. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 750 M.T. of molasses with purposes of testing in the laboratory within the factory. It is the contention of the assessee that these molasses were received in the factory only for the purposes of testing. They have also contended that the tankers whose numbers are mentioned in the above record never reach the factory but only some plastic bags containing molasses came to the factory for testing. They have submitted that only on the basis of this record no duty demand can be raised against them. The Revenue has not conducted any further investigations to ascertain the receipt of this quantity of molasses within the factory. In any case, they have argued that their factory was under the physical control system of the State Government under which all movements of goods into an out of the factory are under the supervision of the State Government amendments. Under such circumstances, it is not open to Revenue to raise a demand by invoking the suppression of facts and taking records to extended period of limitation. They have relied upon the case laws :- Abubakar M.Y. Shaikh vs. CCE, Surat reported in 1999 (110) E.L.T. 917 (Tribunal), Nageswari Match Works vs. CCE, Madurai reported in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liance on several High Courts and Supreme Court s decision to argue that their demand is not sustainable on merits as well as on time bar. 5. The learned DR on the other hand argued with reference to the register BS-26 found in the laboratory to the effect that the appellant has admitted before the Commissioner (Appeals) that the tankers containing the molasses came to the factory for testing purposes. They have also admitted the receipt in their factory in the earlier appellate proceedings. Consequently the duty demand needs to be made from them on this ground. He further reiterated the grounds for confirmation of demand by the Commissioner (Appeals). 6. I have considered submissions made by both sides. The appellant who is a manufacturer of IMFL, receives molasses as the main raw material. Molasses is received mainly from Khandsari units. The scheme of charging excise duty on molasses was at the relevant time covered by Notification No. 6/97-CE (NT) dated 01/3/97 issued under Rule 7A of the erstwhile Central Excise Rules. This notification provided that the person who procures molasses produced in Khandsari factory for use in the manufacture of any commodity shall pay the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04.86 M.T. to various factories. The various documents recovered from these Khandari units indicate clearances of this quantity of molasses to units other than the appellant s unit. However, Revenue has claimed that this quantity of molasses has been supplied by these 5 units to the appellant s factory on the basis of statement given by Shri N.L. Sharma. Shri N.L. Sharma was said to be an employee of M/s Narmada Sugar Mills at the relevant time. In his statement given before the Income Tax Authorities on 21/01/2002 Shri Sharma said that they (Narmada Sugar) had supplied molasses to the appellant. He further submitted that supplies have also been made to the appellant but the documents showed the name of M/s Molasses Traders. However, it is pertinent to record that this is the only statement implicating this quantity of molasses to the appellant. Though Shri Sharma s statement talks only about clearances made by one of the 5 units namely M/s Narmada Sugar Mills, duty demand has been raised against the appellant on the basis of the quantities shown against supply made by all the 5 Khandari units. Further, I find that Shri N.L. Sharma has retracted this statement and an affidavit to t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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