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TMI Blog2019 (4) TMI 431X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 dated 14.11.2002. The adjudicating authority has confirmed demand on the grounds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gned period. He also submits that the insurance surveyor also physically verified the goods cleared by the appellant with regard to loss of material which substantiate clearance of the goods by the appellant. He further submits that the officers of the Department visited the factory premises of the appellant periodically and physically verified the stock and manufacturing activity and no adverse was reported. It is impossible to manufacture and export of the goods without purchase of raw material. He further submits that the appellant has installed DG sets and got the approval for installation of those DG sets from General Manager, DIC, Jammu and also got the consent of Pollution Control Board and its installation, Chief Engineer, Elect. Maintt. & R.E. have also granted permission to install the transformers against the sanctioned load. He also submits that report was sought from the preventive staff, Jammu by the Commissioner, Merrut-II ,with regard to the activity of the appellant and as per report dated 28.04.2010, it was opined that entries of raw material DIC officers was regularly verified purchase consignments, Range Officers time to time visit the factory and nothing advers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India Pvt. Ltd. Reported in 2000 (120) ELT 285 (SC) and C.EX., Shillong Vs. Jellalpore Tea Estate - 2011 (268) ELT 14 (Gau.), the duty cannot be demanded from the appellant. 5. He also submitted that the Jurisdictional Commissioner has sent report to the Chief Commissioner dated 21.05.2010 and the same has not been considered by the adjudicating authority. Moreover, the show cause notice has been issued by invoking extended period of limitation, therefore, the same is not sustainable. 6. He also submitted that the department drew samples for final product on various occasions. Moreover, PBC checks were undertaken, he also submits that in case of Nanda Mint and Pine Chemical Ltd., a similar show cause notice were issued and demand of duty was confirmed but this Tribunal in Appeal No. E/60052/2016 vide Final order No. 63177 / 2018 set aside the demand and held that the said assessee is a manufacturer of goods. 7. On the other hand, the ld. AR reported the findings of the impugned order. 8. Heard the parties and considered the submission. 9. We find that in this case the sole allegation against the appellant is based on the investigation conducted by Commissioner of Central Exci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring the period 2005-2006 to 2008-2009, these 27 units have not purchased crude Mentha oil and therefore have not manufactured any Menthol products in their units at all. There is hardly any time left for further investigation to strengthen the case as process is very time consuming and most of these of units have closed their factories due to withdrawal of Central Excise Duty on all Mentha products w.e.f 27.02.2010. Thus, the investigation may not be in tune with the investigations conducted by the Central Excise Commissionerate Merrut-II." 11. We further take of the fact that the similar issue on identical facts came up before this Tribunal in the case of Nanda Mint and Pine Chemicals Ltd. (Supra), wherein this Tribunal observed as under: "6. We find that in this case the sole allegation against the appellant is based on the investigation made by Commissioner of Central Excise, Merrut, and as per the investigation, it is alleged that farmers from whom the inputs were purchased were nonexistence. Therefore, commission agents never supplied inputs to the appellant and the appellant did not manufacture the goods. Consequently, they have not sold the goods and it was alleged that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese units. 6. Therefore, it may not be strongly alleged with certainty that during the period 2005-2006 to 2008-2009, these 27 units have not purchased crude Mentha oil and therefore have not manufactured any Menthol products in their units at all. There is hardly any time left for further investigation to strengthen the case as process is very time consuming and most of these of units have closed their factories due to withdrawal of Central Excise Duty on all Mentha products w.e.f 27.02.2010. Thus, the investigation may not be in tune with the investigations conducted by the Central Excise Commissionerate Merrut-II." 9. The said report also support the case of the appellant wherein it has been clearly mentioned that during the periodical checks by the departmental officers, the appellant found manufacturing the goods. Moreover, no discrepancy was found and on toll barriers it was found that the vehicles carried inputs/finished goods found entered. Moreover, the District Centre also certified the said fact. 10.We further take note of the fact that the various other departments namely Pollution Control Department, District Industries Department, Electrical Department have visited th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufactured and on which they paid duty and which were exported, if they had been received the inputs from M/s Ruchi Infotech System, Jammu or the other suppliers of inputs. Further, the additional evidence submitted by the appellant indicated that in respect of units in Jammu, Central Excise Officers visited the factory premises and seen that the manufacturing process going on was evidence by them and such evidences being on record and submitted by the appellant it was the duty of the Original Authority to accept them and not to discard by saying that the Officers have not seen the goods being manufactured by their own eyes. Further, the receipt of inputs was verified by the Officers of Central Excise Department and sample of the same were also drawn and forwarded for Chemical Examination. Such evidence was also not accepted by the Original Authority, Therefore, it appears that the Original Authority was pre-determined to adjudicate the matter in the manner in which he has decided the issue and he was not just and fair and did not discharge his duty as an independent adjudicator. We, therefore, set aside both the impugned Orders-in-Original dated 29/01/2010 & 29/03/2011 and allo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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