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TMI Blog2022 (9) TMI 1338X X X X Extracts X X X X X X X X Extracts X X X X ..... n impleaded as respondents. 2. The respondent manufactured and cleared Gutkha under the brand name 'India Gold' for sale in the domestic market. The department believed that the respondent was resorting to clandestine clearance of Gutkha without taking Central Excise Registration. Accordingly, a show cause notice dated 29.01.2009 was issued to the M/s. OM Fragrances, Sumit Aggarwal, partner of M/s. OM Fragrances and Rajeev Gupta supervisor of M/s. OM Fragrances containing the following allegations: "21. Whereas from the foregoing it appears that M/s. OM Fragrances, H.No. 786, opposite Kalandeshwar Shiv Temple, Village Burari, Delhi was responsible for contravening the provisions of Acts/Rules as discussed above in as much as that it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Central Excise Rules, 2002. b. Central Excise Duty of Rs. 96,47,361/- (Rs. Ninety Six Lacs Forty Seven Thousand Three Hundred and Sixty One only) should not demanded & recovered under section 11A of the Central Excise Act, 1944 from the party for the clandestine manufacture and clearances of excisable goods namely 'India Gold' Gutkha for the period December, 2007 to 04.08.08 which includes the duty involved on seized goods. c. Rs. 75,00,000/- (Rs. Seventy Five Lacs Only) deposited towards the Excise dues by Sh. Sumit Agarwal, Partner of the party should not be appropriated and adjusted towards the duty payable by the party. d. Penalty should not be imposed upon M/s. OM Fragrances, H. No. 786, opposite Kalandeshwar Shiv Temple, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the party to redeem the goods on payment of Redemption Fine of Rs. 1,00,000/- (Rs. One Lac only) in terms of section 34 of the Central Excise Act, 1944; 3. I order to appropriate the due amount out of Rs. 75,00,000/- deposited by the party during investigation; 4. I impose a penalty of Rs. 26,29,439/- (Rupees Twenty Six lakhs Twenty Nine Thousands Four Hundred and Thirty Nine only) upon M/s. Om Fragrances under rule 25 of the Central Excise Rules, 2002 read with section 11AC of the Central Excise Act, 1944 read with Rule 17 of PMPMR; 5. I order for recovery of Interest in accordance with the provisions of section 11AA (erstwhile Section 11AB) of the Central Excise Act 1944; 6. I refrain from imposing penalty on Sh. Sumit Aggarwa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce, then its duty liability for the period till it was not registered, shall be determined as if the goods manufactured by the unit were not eligible for levy and assessment under notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 29/2008-C.E. (N.T.), dated the 1st July, 2008 and dealt with accordingly." 11. A notification No. 42/2008-C.E. dated 01.07.2008 was issued wherein the rate of duty for Pan Masala containing tobacco was notified as Rs. 12.50 lakhs per machine per month. 12. Subsequently, by Notification No. 45/2008-C.E. dated 20.10.2008, the 2008 Rules were amended by "Pan Masala Packing Machines (Capacity Determination And Collection of Duty) Second Amendment Rules, 2008". The amended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Principal Commissioner, while applying the unamended rule 17(2), has calculated the duty demand in the following manner: 55. Further, duty has been demanded from December 2007 to 4 August, 2008 and there is no dispute regarding the duty calculated from December 2007 to June 2008. Also there is no dispute regarding MRP of the pouches as well. It is evident that till March 2008, the party was manufacturing Rs. 1 MRP pouch and since April 2008 MRP of the pouches was Rs. 0,50/-. It is also undisputed that duty per month was Rs. 4,23,696/- and Rs. 2,28,144/- when it was manufacturing Rs. 1 MRP pouch and Rs. 0.50 MRP pouch respectively. From this and above discussions, duty is recalculated as below:- Period Amount (in Rs.) Dec., 2007 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h was conducted on 04.08.2008, rule 17(2) had not been amended and the amended rule 17(2) cannot impose duty at a higher rate with retrospective effect. 19. Learned authorised representative has placed reliance upon the decision of the Supreme Court in Government of India vs. Indian Tobacco Association [2018 ACR 440 Supreme Court of India ] as also the decision of the Karnataka High Court in Commr. of C.Ex. & S.T., Bangalore vs. Fosroc Chemicals (India) Pvt. Ltd. [2015 (318) E.L.T. 240 (Kar.)] and the decision of the Madras High Court in Mehler Engineered Products India Pvt. Ltd. vs. Union of India [2018 (364) E.L.T. 27 (Mad.)]. 20. The Supreme Court in Indian Tobacco Association held as follows: 15. The word "substitute" ordinarily wou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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