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TMI Blog2018 (12) TMI 1165X X X X Extracts X X X X X X X X Extracts X X X X ..... of various commission agents and buyers as well as sellers of Menthol Solution DMO. The officers found that commission agents are neither maintaining proper record of sale of raw material nor purchased the raw material. The commission agents had issued Kissan Kharid Patra to various farmers whereas the investigation conducted at the end of farmers indicates that the farmers are non existence. On the basis of investigation at the end of commission agents and farmers, the Merrut Commissionerate concluded that J K based units are not purchasing raw material, so there is no question of manufacture of finished goods by J K based units, the goods manufactured were sold to UP based manufacturers who in turn partially exported their finished goods and partially sold in domestic market. The Merrut Commissionerate issued show cause notices to UP based manufacturers to deny cenvat credit availed on goods purchased from J K based suppliers and at the insistence of Meerut Commissionerate, the jurisdictional Commissionerate issued show cause notices to various J K based manufactures raising demand of duty refunded to them who are availing area based exemption under Notification No. 56/2002-CE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hed goods. We further take note of the fact that the during the period of investigation itself, the appellants were allowed to continue their activity by procuring inputs from UP based supplier and selling goods manufacturing to their buyers. During the course of investigation, itself shows that the allegation is only on the basis of the assumption and presumption, therefore, it cannot be held that the appellants had not manufactured the goods during the impugned period. Moreover, as per the report of Jurisdictional Commissioner to Chief Commissioner dated 21.05.2010 reveals as under: 5. Thus the officers of Merrut-II Commissionerate, instead of selecting the consignments where no excisable goods were manufactured/supplied, have generalized that all the purchases of crude Mentha oil by these Mentha units located at Jammu were bogus units, these units did not have any infrastructure to manufacture the said products, were non-functional and Transporters who did not tum up for tendering statements were declared non-existent etc. however, on close scrutiny of the records, the following facts emerges: (i) Most of the consignments of raw material were found entered at the To ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Commissioner of Central Excise, Merrut is not sustainable. 8. Further, we take note of the fact that during the period of investigation itself, the appellant continued their activity by procuring inputs from U.P and selling the goods after manufacturing to the U.P based buyers and the Department allowed to continue the same during the course of investigation which shows that the allegation on the basis of investigation conducted at the end of Commissioner of Central Excise, Merrut is not sustainable that the appellant is not manufacturer the goods. Admittedly, duty is payable on the manufacture of goods and as per the report of the Commissioner of Central Excise, Jammu dated 25.02.2010, it has been revealed as under: 5. Thus the officers of Merrut-II Commissionerate, instead of selecting the consignments where no excisable goods were manufactured/supplied, have generalized that all the purchases of crude Mentha oil by these Mentha units located at Jammu were bogus units, these units did not have any infrastructure to manufacture the said products, were non-functional and Transporters who did not tum up for tendering statements were declared non-existent etc. ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ind that the basic allegations in the Show Cause Notice was that M/s Arora Aromatics did not receive inputs on which they availed Cenvat credit basically on the contention of Revenue that M/s Ruchi Infotech System, Jammu did not have facility to manufacture the inputs received by M/s Arora Aromatics and that the goods did not move from Jammu Kashmir to the appellants factory and therefore, Cenvat credit was not admissible. The evidence submitted by the appellant in the form of Order-in-Original passed by Commissioner of Central Excise, Jammu on 31/03/2008, wherein it was held that M/s Infotech System, Jammu was manufacturing the goods was not accepted by the Original Authority stating that the said Commissioner, Jammu did not see himself that the goods have been manufactured. If such a logic is accepted then the basic system of assessment by Authorities under tax statute needs to be concluded to have been not properly understood by the Adjudicating Authority. The present system of assessment in Central Excise is record based. The Officer assessing the duty is not required to be present when the goods are being manufactured to witness the process of manufacture. The adjudication i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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