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TMI Blog2018 (7) TMI 1278X X X X Extracts X X X X X X X X Extracts X X X X ..... ows that if an assessee is otherwise is in a position to establish actual date of stock of manufacture, the deeming provisions would not apply. It, thus, simplicitor leads us to hold that if the evidence is available on record to show the actual period during which production and clearance of Pan Masala had taken place, duty would be confirmed from that date only - Deeming provision is applicable in those cases where there no evidence of start of production is available. In the present case, the Commissioner has accepted that the appellant was indulging in manufacture and clandestine clearance of Pan Masala since January, 2011. There is also evidence on record to show that there was agreement between the appellant and their brand owner, Shri Sunil Kumar Agarwal, Director of M/s Astha Fragrance Pvt. Ltd. which was executed with effect from 01/10/2010 and the present premises in which the machines were found to be installed were taken on rent by the appellant from January, 2011 as per the statement of the owner of premises. As such, it is clear that the appellant was manufacturing the said goods in rented premises with effect from January, 2011 - the duty liability is legally to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Statement of Shri Bhagwan, who was present on the spot and introduced himself as Supervisor of the said unit was recorded on 10/04/2011 itself in which he inter alia stated as under:- In the premises the unit was engaged in the illicit manufacture and clearance of Chandrakanta Brand Pan Masala. Chandrakanta Brand Pan Masala of MRP ₹ 1/- was being manufactured at this premises, since last four months with the help of two FFS Pan Masala/Gutkha Pouch Packing Machines, working round the clock. The said Pan Masala was being manufactured on the directions of Shri Ajay Agarwal and Shri Sunil Agarwal, who bring all the raw material related to Pan Masala and take away the packed pouches of manufactured Pan Masala. The names of M/s Taj Products, Agra and M/s Astha Fragrance Pvt. Ltd., Agra are printed on these pouches. The loose Pan Masala was coming from M/s Taj Products, 15 Yamunotri Vihar Kamla Nagar, Agra. 4. Statement dated 10/04/2011 of Shri Vipati Singh landlord of the searched premises was also recorded wherein he, inter alia stated that he is the owner of the premises, which have been rented out to Shri Ajay Agarwal since last 3-4 months at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacture of Pan Masala from different premises in village Rehan Kala and he is not responsible for the same. 7. During the course of further investigations statement of various other persons were recorded. On the basis of the investigations, a show cause notice dated 03/04/2012 was issued to the appellant proposing confirmation of demand of duty as also for imposition of penalty. Notice also proposed imposition of penalty on Shri Sunil Kumar Agarwal, Director of M/s Astha Fragrance Pvt. Ltd. The show cause notice referred to the provisions of Rule 17(2) of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 and demanded duty from April, 2010 to the extent of ₹ 2,40,50,000/- (Two crores Forty lakhs fifty thousands). The notice proposed imposition of penalty upon the manufacturer as also upon the owner of the brand name. The said show cause notice stands adjudicated by Commissioner vide which he has confirmed the duty, as proposed along with confirmation of interest and imposition of penalty of identical amount. In addition penalty of the same amount stand imposed upon Shri Sunil Kumar Agarwal, Director of M/s Astha Fragrance Pvt. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to travel to the previous Financial Year i.e. 2010 and the Commissioner has rightly invoked the provisions of Rule 17(2) of the said rules and has rightly confirmed the demand. 10. After considering the submission made by both sides, we find that the dispute revolve around interpretation of the provisions of Rule 17(2) of the said rules. For better appreciation of the rule in question the same is reproduced below:- (2) If it is found that goods have been cleared from a unit which is not registered with the jurisdictional Central Excise Office, then the duty liability of such unit shall be determined on the basis of number of packing machines found available in the premises of the unit and the retail sale price of the pouches manufactured with the aid of such packing machines and unless evidence to the contrary is provided to the satisfaction of the Central Excise Officers such machines shall be deemed to have been in operation since the first day of April of Financial Year in which the unit was found to be not registered. And shall be construed as operating packing machines for the purposes of Rule 7 and dealt with accordingly. 11. On going through the said rule, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above, we set aside the impugned order and remand the matter back to the Original Adjudicating Authority for quantification of exact amount of duty liability against the M/s Taj Products for the period of actual manufacture of the goods and for imposition of penalty. 14. As regards penalty imposed upon Shri Sunil Kumar Agarwal, we find that he was the owner of brand name Chandrakanta which was used by Shri Krishan Gopal Lawania as per the agreement entered into between the two on 01/10/2010. In terms of the said agreement Shri Krishan Gopal Lawania was to manufacture Pan Masala under the said brand name, from registered premises at 15, Yamunotri Vihar, Kamla Nagar, Agra. In fact, the appellant was manufacturing in the said premises and was paying duty. It is only subsequently they started manufacturing from the present factory located at Village Rehan Kala, Etmadpur, Agra by clandestinely installing two packing machines there. There is no evidence on record to suggest that the said activity was in the knowledge of Shri Sunil Kumar Agarwal. In such a situation, the owner of the brand name cannot be, held liable to penalty. We accordingly, set aside the penalty imposed upon him ..... X X X X Extracts X X X X X X X X Extracts X X X X
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