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TMI Blog2019 (1) TMI 744X X X X Extracts X X X X X X X X Extracts X X X X ..... es. 2 3. Learned A. R., on the other hand, invited our attention to the findings of learned CIT(A) recorded by him at para 4(4)(a). Learned A. R. further submitted that no incriminating documents were seized from the premises of the assessee which could have pointed out that the turnover recorded by Balaji Marketing were the sales of the assessee company. Our specific attention as also invited to para 4.8 onwards of learned CIT(A)' order. 4. As regards the additional evidence, Learned A. R. submitted that no additional evidence was there and the additional evidence being talked about by Learned D. R. is a correspondence which was made by Assessing Officer and Range Head in terms of difference of opinion and issues mentioned in appraisal report in the case of the assessee and it was submitted that learned CIT(A) has allowed relief to the assessee and has just strengthened his order by recording the contents of letter. 5. We have heard the rival parties and have gone through the material placed on record. The brief facts, as noted in the assessment order, are that a search & seizure operation action u/s 132 of the Act was carried out on the Shimla Kayam Gutkha Group of cases on 06 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was code name of the assessee. Therefore, Assessing Officer rejected the claim of the assessee and held that Balaji Marketing must have purchased its unrecorded turnover from the assessee and therefore, the assessee was show caused as to why the unrecorded turnover of Balaji Marketing be not treated as unrecorded turnover of the assessee also. In response the assessee submitted that the unrecorded turnover of Balaji Marketing was not related to the assessee. However, the Assessing Officer held that the facts of the case point towards the unaccounted turnover of Balaji Marketing being drawn out of the sale of manufactured products of the assessee and therefore, unaccounted income @50% of the unaccounted turnover of Balaji Marketing was made as addition to the income. The learned CIT(A) however deleted the same by holding that there was no evidence to substantiate that unrecorded turnover of Balaji Marketing was necessarily out of unrecorded turnover of the assessee. We find that it is an undisputed fact that the assessee and Balaji Marketing, which is a partnership firm of spouse of one of the partners of the assessee company are group companies. It is also an undisputed fact that h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Flavour, the appellant were found. No correlation could be established for the treatment of turnover recorded under the head brand "Tie" in the excel files 7' 'GHEE123' in the tally accounts of M/S Balaji Marketing as the turnover of 'kayam' brand of the appellant, which is a presumption made by the AO. 4(9)(i) Now coming to the manufacturing activities of the appellant, I find that the appellant deals in manufacturing of pan masala gutkha which is governed by the compounded levy scheme of the Excise Rules. In 2008, the Central Government, in exercise of the powers conferred by Section 3A of CEA, 1944, framed Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 to levy and collect the excise duty with respect to the manufacturing of Pan Masala. The whole theme of compounded levy is based on the deemed production instead of actual production. In deemed production a quantity is deemed to be produced by using one machine for a particular period of time. First off, the. manufacturer has to declare certain information, in accordance with Rule 6, in Form 1 to the Central Excise at least seven days prior to the commencement of pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... production. To claim such abatement, the manufacturer has to intimate the Deputy Commissioner of Central Excise or Assistant Commissioner of Central Excise at least three days before the commencement of such period of non production. According to Rule 7 duty payable for a particular month shall be calculated by application of the appropriate rate of duty by the government to the number of operating packing machines in the factory during the month. Rule 9 prescribes manner of payment of excise duty. The payment of the ascertained duty in normal scheme is made in the following month of the production. But, in case of compounded levy scheme (Pan Masala Rules) the payment is to be made in advance i.e. by the 5th day of the same month of production. It is also known as advance payment in taxation parlance. The manufacturer is bound by the following restrictions as provided under Rule 13 of Pan Masala Rules, 2008 - -In case if he intends to stop operating any machine, he has to intimate the concerned Excise Officer about his intention at least 3 days in advance. No concession in the duty payable will be granted if he stops operating any machine without intimation. -The concerned off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be established." 5.1 The above findings of learned CIT(A) are quite exhaustive and Learned D. R. was not able to contradict these findings. The learned CIT(A) has exhaustively examined the fact that assessee was subjected to excise duty on the goods manufactured by it. The learned CIT(A) has also held that excise duty was being imposed on the assessee on the basis of deemed production based upon number of machines installed and their capacity. The assessee being engaged in excisable goods was not found to have manufactured goods in excess of capacities of machines. No documentary evidence was available in the seized material which established any unaccounted turnover between assessee and Balaji Marketing. Further during course of search, no document related to unaccounted manufacturing of goods was found. We find that proprietor of Balaji Marketing 9 had accepted its unaccounted turnover and he had also stated that he had purchased the goods from open market to meet out the increased demand. In view of the above facts and circumstances, we do not find any infirmity in the order of learned CIT(A). 5.2 As regards the ground relating to additional evidence, we find that the so ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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