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TMI Blog2002 (8) TMI 245X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant no. 1, were found to have been installed at the relevant time; while appellant no. 4, Shri N.K. Pandey, was the accountant in the firm, at that time. On 24-9-1997, the Officers of the Central Excise visited the manufacturing unit of the firm, appellant no. 1, and discovered certain discrepancies with regard to raw materials as well as finished goods. The Officers found that as against the declaration of the firm, appellant no. 1, that only 16 pouching machines were in operation, another 16 pouching machines (7 installed in the factory and 9 in the unregistered premises) were found to be in operation, at that time. The production made through the extra 7 machines was not accounted for in the record by the firm, during the months of August and September, 1997. Besides this, 9 pouching machines were found to have installed in the premises owned by Shri Pankaj Chourasia, appellant, located just opposite the residence of Smt. Asha Chourasia, Proprietor of the firm, appellant no. 1. No declaration in respect of those machines was made by the firm to the Department. 3.The premises of the two trading firms, of appellants no. 2 and 5, were also searched. During the search of the fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 697.50 and 48 kgs. of loose Sada Masala recovered from the unregistered premises owned by the appellant, Shri Pankaj Chaurasia, and belonging to the firm, appellant no. 1, with an option to get the same redeemed on payments of Rs. 11,000/- and 3,600/- respectively; confiscation of 5 bags of Pukar Brand Gutkha valued at Rs. 44,687/- seized from the premises of the firm, M/s. U.P. Marketing, of appellant no. 5; 3 bags of Pukar Gutkha and Pukar Sada Pan Masala seized from the premises of the firm, M/s. R.P. Products, valued at Rs. 33,576/-, under Rule 173Q of the Rules, with an option to get the same redeemed on payment of redemption fines of Rs. 11,000/- and 8,500/- respectively, as ordered by the Commissioner through the impugned order, is concerned, the correctness of the same has not been questioned before us by the learned Counsel. Therefore, the impugned order of the Commissioner in this regard is affirmed. 5.The learned Counsel has, however, contested and questioned the validity of that part of the order of the Commissioner, vide which the duty demand of Rs. 32,00,000/- for the months of August and September, 1997 had been confirmed confiscation of 9 pouching machines redeema ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons in the show cause notice, 7 extra machines were found to be installed in the factory premises, while the other 9 machines were installed in the unauthorised premises taken on rent by the firm, appellant no. 1, from Shri Pankaj Chourasia, appellant. But there is no reliable evidence on the record to prove the actual user of any of these machines. No evidence has been brought on record regarding the quantity of the extra raw material purchased, electricity consumed by the firm, appellant no. 1, during the months of August and September, 1997. No statement of any buyer had been recorded to whom the Pan Masala was disposed of allegedly without payment of duty by the firm. The total quantity of even the Pan Masala manufactured during these two months and allegedly cleared in a clandestine manner had not been determined and proved on the record. No presumption regarding the user of the 7 machines installed in the factory premises could be drawn from the simple fact that their sale seals were found to be broken. Similarly, regarding the other 9 machines allegedly installed in unauthorised premises, no evidence has been brought on record to establish that those were also used in the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e amount of Rs. 8,43,000/- had been confiscated on the ground that the same was the sale proceeds of the Pan Masala manufactured by the firm, appellant no. 1, and cleared without payment of duty. But there is no reliable evidence on the record to substantiate the order of the Commissioner in this regard. Section 121 of the Customs Act is attracted only where the smuggled goods are sold by person having knowledge or reason to believe that the goods were smuggled one. It is only in that event, the sale proceeds of the smuggled goods, are liable to be confiscated under the said Section. But, in the instant case, the currency has not been found from the premises of the firm, appellant no. 1, which is manufacturer of the branded Pan Masala and Gutkha, but from the premises of trading firm, M/s. R.P. Products. Shri Rajkumar Chourasia, appellant, in his statement dated 4-10-1997 only stated that this amount was the sale proceeds of the Pan Masala, but he had nowhere conceded that the said Pan Masala was manufactured and cleared by the firm, appellant no. 1, without payment of duty. There is also no evidence on the record to prove his knowledge about the non-payment of duty on the clearanc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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