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TMI Blog2024 (12) TMI 737X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 70168 of 2013 filed by Shri. Rahul Nangalia, Director of the appellant-company against the penalty imposed on him. As all the appeals emanate from the same order, all are taken up together for decision by a common order. 2. Brief facts of the case are that the appellant is a manufacturer of Refined Palm Oil (RPO) by processing Crude Palm Oil. From RPO, Interesterified Vegetable Fat(IVF) is manufactured. In the course of manufacturing of RPO, Fatty Acid is produced as a by-product. The appellant also manufacture Plastic Jar and Tin Container in which the final products (RPO & IVF) are packed and cleared. The appellant also involved in trading business for RPO. The trading goods normally do not enter into the factory premises. Only a small portion occasionally enters into the factory premises. The final products (RPO & IVF) enjoy the benefit of exemption under notification No 4/2005. For all these operations they have taken registration from central excise department, bearing No AARCB2880MXM001 and have been paying duty where ever applicable and submitting monthly return ER-1 returns. 2.1. A show cause notice dated 06.05.2011 was issued to the appellant demanding duty on variou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tured goods. The department alleged that the appellant has used the said Tin container and poly jars for packaging of the goods in other's brand name and trading goods, but did not maintain any separate accounts. Accordingly, the notice alleged that they are not entitled for benefit of Notification No. 10/96-CE dated 23.07.1996. Duty amounting to Rs. 27,92,810/- and Rs.50,95,061/- has been demanded in the notice in respect of poly jar and Tin container respectively, by denying the benefit of notification 10/96-CE dated 23.07.1996.(Annexure C-4 and C-5 to SCN). The adjudicating authority has confirmed both the demands on the basis of the statement dated 10.12.2008 given by Mr. Deepak Keshan, Director, wherein he has admitted that purchased RPO has been stored in same tank with manufactured RPO. Thus, the Ld. Adjudicating authority concluded that the terms of the Notification No. 10/96-CE has not been fulfilled in as much as this exemption notification requires consumption of goods produced within the factory of production exclusively in the manufacture of the final products". Accordingly, the demands were confirmed along with interest and equal amount of duty as penalty. The appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly in the manufacture of the final products manufactured within the factory. It is alleged in the impugned order that the appellant have cleared the goods with other persons brand name and hence they are not eligible for the benefit of the exemption notification 10/96.CE. The appellant submits that the Brand Names Sathi Gold, Supriya Bhojan and Sarona, all belongs to the appellants only. Hence, there is no question of selling of goods in other's brand name in the Tin Containers and Poly Jars produced at their factory. The Allegation of selling trading goods to M/s. EPKAN Associates during the period from 01.04.2008 to 02.12.2008 in 15 kg Tin and 15 kg Jar, is absolutely incorrect since appellant started production of Tin Containers from 29.05.2008 and Poly Jars from 28.02.2008 only for captive consumption. The department has not conducted any investigation with such buyers or any other dealers to corroborate the allegation. The Appellant submits that they had sold trading materials only in tankers. Accordingly, the appellant submits that the denial of benefit of 'nil' rate of duty for the jars and containers produced by taking the benefit of the Notification No. 10/96-CE dated 23.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the duty and requested for non-issuance of Notice, we observe that the adjudicating authority has confirmed this demand along with interest and imposed penalty equal to the duty confirmed. The submission of the appellant is that the two dealers have existed during the relevant period and issued consignment notes and there was no investigation conducted by the officers to ascertain their existence. We observe that the officers of the Delhi Commissionerate conducted verification and found that the two dealers namely, M/s. Mayur Sales Corporation and M/s. Sunrise Enterprise were nonexistent. Thus, we observe that there is no truth in the submission of the appellant that no verification was conducted by the department to ascertain the existence of the two dealers. As the verification conducted by the officers of Delhi Commissionerate revealed the nonexistence of the two dealers, we hold that the demand confirmed on account of undervaluation of the goods cleared to these two dealers in the impugned order, is sustainable. Accordingly, we uphold the demand of Rs.5,68,101/- confirmed in the impugned order along with interest. As the suppression of value has been established, we uphold the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... denial of the benefit of notification 10/96-CE for all the goods manufactured and cleared is legally not sustainable. The benefit of notification 10/96-CE is not available to the appellant proportionately to the extent of value of the traded goods cleared by the appellant in the containers and jars. From the impugned order, we observe that demands of Rs.27,92,810/- and 50,95,061/- has been confirmed by denying the exemption 10/96-CE for all the goods. In view of our observations supra, the benefit is to be denied only proportional to the value of the traded goods. As the segregation of value of traded goods has not been done in the impugned order, we set aside these demands and remand this issue back to the adjudicating authority to deny the benefit of notification 10/96-CE proportional to the value of traded goods cleared by the appellant during the period in which traded goods were cleared in tin containers from 29.05.2008 and in poly jars from 01.04.2008. 6.3. Regarding the demand of duty of Rs.53,38,184/- on account of Clandestine Removal of 1157.346 MT of Fatty Acid in the guise of Refined Palm Oil, we observe that the demand has been confirmed purely on presumption basis. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s such as Laboratory registers, Despatch registers, sales ledgers, job dispatch ledgers etc. maintained by the notice no 1 themselves, in their factory premises, whereas, the notice no.1, while contesting the instant issue could not adduce any counter evidence, thereby, failed to discharge their burden of proof against the Department's allegation". We observe that there is no such comparative chart and department has failed to provide even an iota of proof as to excess removal of Fatty Acid or removal of Fatty Acid in the garb of RPO. 6.4. We observe that the allegation of clandestine clearance is of serious nature and hence there should be tangible evidence of clandestine manufacture and clearance and not merely inferences or unwarranted assumptions. In the present case, we observe that the demand has been confirmed purely on assumption basis. There is no evidence of actual removal of unaccounted finished goods from the factory without payment of duty. No finished goods cleared clandestinely has been recovered outside the factory. The department has not identified any purchasers of the clandestinely cleared finished goods. There is no corroborative evidence in the form of rec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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