9911796707
TMI Blog2024 (2) TMI 814X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER 1. I confirm the demand of Rs.12,50,000/- (Rupees Twelve Lcs Fifty Thousand Only) under Section 11A (2) of the Central Excise Act, 1944, upon M/s Shimla Food & Flavours, Khurshedbagh, Lucknow along with interest under Section 11AB of Central Excise Act, 1944. 2. I drop the demand of Rs.37,50,000/- (Rupees Thirty Seven Lacs Fifty Thousand Only) as discussed above. 3. I, however, in the facts and circumstances of the case do not propose to impose any penalty." 2.1 Appellant is a manufacturer of Pan Masala containing tobacco called 'Gutkha' under the brand name of 'Gomti' classifiable under sub-heading No.24039990 of first schedule to Central Excise Tariff Act, 1985 of the Retail Sale Price of Rs.1.00 per Pouch. W.e.f. 01.07.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... achine per month as Rs.12.5 lakhs, appellant was required to pay duty of Rs.1,12,50,000/- during the month of July, 2008 whereas they discharged duty liability of Rs.62.50 lakhs only. Accordingly, they were issued with a show cause notice asking them to show cause as to why- i) The Central Excise duty amounting to Rs.50,00,000 (upees fifty lac only) short paid by the Noticee for the month of July'08 should not be demanded and recovered from them under Section 11A of Central Excise Act, 1944 alongwith interest at appropriate rate under Section 11AB of the Act ibid. ii) Penalty should not be imposed upon them under Rule 17 of the Pan Masala Packing Machines (Capacity Determination And Collection of Duty) Rules), 2008 read with Rule 25 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ged in manufacturing process are relevant. Therefore the basic issue that needs to be addressed in these proceedings is to find out the actual number of installed and operating packing machines during the month of July 08. For ascertaining this, I have carefully gone through various sealing request letters given by the Noticee in respect of sealing/unsealing of machines in their factory from time to time and the sealing/unsealing reports given on the face of such request letters he copies of these reports were submitted by the Noticee in their defence reply. These have been got crosschecked from the jurisdictional authorities and were found in order. From the perusal of the sealing request dated 12.06.08 and the remark appearing therei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gutkha. Most importantly, no ground plan showing the position or segregation of machines in their premises had been filed by the Noticee alongwith their Form-1 Declaration dated 10:07.08 In view of this, the sixth machine which was purported to have been operated for manufacturing of Sweet Supari only, would deem to have been used for manufacture of Gutkha too and would, thus, be an operating packing machine for the month of July'08. It is not under dispute that the machine said to be used for manufacturing of 'Sweet Supari was installed/unsealed and operational during the month of July 08. It is also evident from the ER-1 of July 08 that the manufacturing of Sweet Supari during the month had taken place and had been shown in the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y duty in respect of 6 machines only. As they have paid duty in respect of five machines only, there was a short payment of 7.12.5 lacs which is liable to be recovered from them under Section 11A (1) of the Act along with interest. The Noticee have raised certain arguments which are not relevant to the facts of the case like re-fixation of the capacity on the basis of number of days for which machines were operated during whole of the year. This argument is untenable as it has been seen that liability of duty is to be calculated monthly and on the basis of maximum number of machines operated on any day of the month. In view of these specific provisions, it is not relevant as to for how many days, the machines were operated during the mont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellow:- 4.4 Commissioner in the impugned order no discussion has been made about the ground plan which clearly shows that one separate machine has been installed in a separate room and other five operational pouch packing machines used for packing Gutkha. It is also evident that on 03.07.2008 officers has sealed 5 machines and unsealed five pouch packing machines on 07.07.2008, as is evident from the remark affixed on the letter dated 30.06.2008, which is reproduced bellow:- 4.5 Further in their declaration, they have stated that out of six machines available in their premises 5 were being used for packing of Gutkha and one was used for packing sweet supari. No findings has been rendered by the Commissioner taking into account the ground ..... X X X X Extracts X X X X X X X X Extracts X X X X
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