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TMI Blog2018 (12) TMI 778X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacture of similar products. The present dispute is for the period April 2006 to July 2007, during which the Revenue alleged that the assessee did not fully account the goods manufactured in the factory in the statutory records and cleared the unaccounted portion clandestinely without payment of duty. The Show Cause Notice dated 21/02/2008 proposed the demand of Central Excise Duty amounting to Rs. 9,07,16,213/- along with interest and penalties. 3. Prior to the present proceedings, the Revenue Authorities, under DGCEI, New Delhi investigated the allegation of clandestine manufacture and clearance of Khaini in respect of the Delhi Unit as well as the Kolkata Unit. This resulted in the Show Cause Notice dated 24/05/2006 being issued covering the period 01/05/2001 to 31/03/2006, commonly in respect of both the units. Upon receipt of the Show Cause Notice, the assessee approached the Hon'ble Settlement Commission, New Delhi. In the matter, the Settlement Commission ordered payment of Central Excise Duty as per a formula worked out by them as 62 kg of tobacco required for 100 Kg of Khaini. This order was accepted and complied with by the assessee. 4. In the present round of litig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e were regularly recorded in the statutory records. (II) The Department has not brought on record any evidences of extra or additional or unaccounted receipt of raw materials. Likewise no evidence at all of any additional or unaccounted production of khaini or clearance thereof has been brought on record. (III) Even though the details of the various buyers of Khaini from the assessee was available to the department, no evidence has been gathered by way of investigation at the buyer's end. (IV) There is no basis for adopting the formula as outlined either in the Show Cause Notice or as adopted by Adjudicating Authority. No formula has been fixed either by CBEC or any other authority. The Department has not carried out any other verification of the actual ingredients used per batch in the appellant's factory. Not even a test check has been carried out. (V) It has been urged that the reports of Shriram Institute for Industrial Research, which was relied upon in the proceedings before the Settlement Commission, is un-reliable and incorrect. (vi) Clandestine clearances are required to be supported by tangible evidences and the revenue has failed to bring such evidence. In this conn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ported by evidences may be set aside. He also added that substantially part of the demand will be hit by timebar in as much as an earlier investigation has been carried out by the Department into the same allegations and SCN already issued invoking the extended period under Section 11A. 12. The Ld. DR while arguing the grounds of appeal submitted that the demand may be confirmed as per Show Cause Notice. He specifically, submitted that the assessee's manufacturing process has remained the same during the current period of demand, as it was during the earlier investigation period. This aspect has been confirmed by Shri Subash Bhunia in his statement dated 20/05/2006. In the present case, there was no need to procure documentary evidence regarding purchase of additional raw materials since the alleged unaccounted quantity of Khaini has resulted, not on account of use of any additional raw materials, but on account of the fact that the quantum has increased by addition of water and the same has not been recorded. 13. Heard both sides at length and perused the record. 14. The present proceedings have covered the demand for duty raised vide SCN dt. 21/02/2008, for the period April 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ula arrived by the Settlement Commission. In particular, they have pointed out that corroborating evidence available in the earlier case in the form of procurement of raw materials as well as the oral evidence of the transporters is absent in the present period. Finally they have submitted that in any case, a part of the demand will be hit by time-bar in view of the fact that Revenue has already investigated the same allegations for the earlier period and issued SCN invoking the extended period of limitation. They have cited the decision of the Hon'ble Supreme Court in the case of Nizam Sugar Factory Vs. Collector of CE-AP 2008 (9) STR 314 (SC). 18. As discussed above, the assessee has admitted that they have continued to follow the same process of manufacture; and the percentage of ingredients during the current period of dispute, as in the earlier period which was already investigated and settled. The proprietor in his statement dt. 20/05/2006 has also admitted to the fact of non accountal of the additional quantity of khaini as result of addition of water. 19. The Adjudicating Authority in the impugned order has proceeded to quantify the demand on the basis of formula crystall ..... X X X X Extracts X X X X X X X X Extracts X X X X
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