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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 ..... /2008 - FO/76959-76960/2018 - Dated:- 12-11-2018 - SHRI P. K. CHOUDHARY, MEMBER (JUDICIAL) And SHRI V. PADMANABHAN, MEMBER (TECHNICAL) Shri, Ravi Raghavan, Adv. Miss N. Agarwal, CA for the Appellant (s) Shri H. S. Abedin A. C. (A. R.) for the Revenue ORDER PER BENCH These two appeals are directed against the Order-in-Original No. 15/COMMR/CE/KOL-III/2008-09 dated 20/06/2008. Both the cross appeals are being decided to this common order. 2. The assessee is a manufacturer of Chewing Tobacco popularly known as Khaini with their brand name RAJA KHAINI falling under Central Excise Tariff Sub Heading 24039910. This product is manufactured from raw tobacco which is the main raw material; but other ingredients are also added such as snuff powder, refined groundnut oil, lime, black peeper, minor quantity of Kewra water and menthol etc. The assessee has one unit at Titagarh, Kolkata (which is the subject matter of the present dispute) and another unit at Pratapganj, New Delhi for 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 g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mula as crystallized by the Settlement Commission vide their order dated 29/02/2008. Accordingly, 62 Kg of Tobacco was considered as required for every 100 kg of Khaini, the final product. By adopting this formula, the Adjudicating Authority restricted the demand to ₹ 2,84,26,761/- along with interest and penalty of an equal amount. 6. The impugned order has been challenged by both sides. The Revenue s appeal seeks to raise the total demand to that made in the relevant Show Cause Notice. On the other hand, the assessee has challenged the demand confirmed in the impugned order itself. 7. Heard Shri Ravi Raghavan, Ld. Advocate and Shri H. S. Abedin, Ld. DR. 8. The main grounds of the assessee are summarized below as argued by Ld. Advocate: (I) The entire demand is based on earlier investigation pursuant to the search of 31/05/2005 without any further investigation for the period in dispute. During the period of the present dispute the appellant was registered with the Department and the entire production and clearance were regularly recorded in the statutory records. (II) The Department has not brought on record any evidences of extra or additional or unaccounted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue that the product involved in the subsequent period was different, viz. Premium Khaini . Consequently Hon ble HC held that the Settlement Commission s formula cannot be applied to the subsequent period and directed the Adjudicating Authority to determine the appropriate ratio for deciding the increased weight in respect of the new product. 10. The ld. Counsel submitted that in the initial proceedings which culminated in the order of the Settlement Commission, three evidences were available on record. (I) The record of additional raw materials procured by the assessee. (II) Overall evidence in the form of statements of various transporters confirming the transportation of clandestinely cleared goods. (III) Unaccounted quantity of Khaini by not taking into account the increase in weight on account of addition of water. 11. In the present case, he highlighted that absolutely no evidence in the form of raw material procurement or transportation of goods have been gathered by the Department. Finally, he submitted that the confirmation of demand, not supported by evidences may be set aside. He also added that substantially part of the demand will be hit by timebar in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the earlier Show Cause Notice. But the Adjudicating Authority restricted the demand confirmed to that arising on the basis of the formula worked out by the Settlement Commission. 16. During the course of present proceedings, Revenue has recorded the statement of Subash Bhunia, Accountant of the assesee on 19/04/2006 in which he has confirmed that the process of manufacture and the percentage of ingredients used during the present period of demand has remained the same as for the earlier period which got settled before the Settlement Commission. This aspect has also been admitted and confirmed by Shri Loknath Prasad Gupta, Proprietor, in his statement, dated 20/05/2006. Both the above persons have further confirmed that the assessee continued to adopt the same practice as in the earlier period of not accounting the additional quantity of Khaini arising as a result of water added during the process of manufacture. 17. The assessee in their appeal have vehemently argued that the Revenue has gathered no additional evidence for the present period other than adopting the formula arrived by the Settlement Commission. In particular, they have pointed out that corroborating evide ..... X X X X Extracts X X X X X X X X Extracts X X X X
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