CX - Rly. Authorities have provided general information in r/o entire Gutkha booked at Agra Rly Stn and it does not indicate that said goods were manufactured by appellant and cleared without payment of CE duty - Rs 13 crores demand set aside: CESTAT
By TIOL News Service
ALLAHABAD, DEC 30, 2016: THE appellants are engaged in the manufacture of Pan Masala and Gutkha under the brand name "Jeet" & "Andaaz".
The Officers of DGCEI conducted simultaneous searches of manufacturing premises, godowns, office premises, residential units, packing material supplier and transporter and also seized goods and raw materials.
On the basis of investigations carried out at the end of transporter Bharat Freight Carrier and on the basis of information obtained from Railway Authorities in respect of goods booked for transportation, it appeared to Revenue that appellant evaded Central Excise duty on "Jeet" & "Andaaz" brand Gutkha by removing the goods clandestinely without payment of Central Excuse Duty.
Inasmuch it was revealed that the appellant used to transport "Jeet" & "Andaaz" brand Gutkha to various destination through M/s BFC and whenever the consignment was cleared on payment of duty, a regular transport document was prepared and whenever the excisable goods were clandestinely removed without payment of duties, the goods were booked as "Pashu Ahaar" and transported through M/s BFC and a different size transport document was prepared for the same.
The DGCEI concluded that the appellant had cleared 9403 numbers of bags containing Gutkha cleared clandestinely without payment of duty in the guise of "Pashu Ahaar" transported by road transport. Similarly, on the basis of documents seized during the said searches, they approached the Railway Authorities and requested Chief Divisional Commercial Manager to provide copies of GRs book available at Agra Fort, Railway Station covering the period from 01.01.2003 to 14.12.2005 and concluded that all such clearances of Gutkha booked at Agra Fort Railway Station was manufactured by appellant; that out of a total of 52447 bags of Gutkha cleared through Railway, 40553 bags was cleared without payment of duty.
Thus, a demand notice was issued for recovery of CE duty of Rs.13,06,19,045/- and later confirmed by the adjudicating authority; seized goods were confiscated and penalties were imposed.
The appellants have challenged the said order before the CESTAT and denied the charges leveled.
After considering the submissions made by both sides, the Bench observed -
++ Billty books and challans resumed from transporter M/s BFC are not relied for issue of show cause notice and it is claimed by Revenue that Annexure-A to the show cause notice was prepared on the basis of billty books and challans resumed from transporter. Annexure-A indicates that 9403 number of bags of Gutkha were cleared through M/s BFC in the guise of Pashu Ahaar. The statements as stated above of the witnesses which were dealing with goods in BFC have categorically stated during their cross-examination that Gutkha was never booked in the guise of Pashu Ahaar. Therefore, we hold that there is no evidence to establish that 9403 bags of Gutkha was manufactured by M/s P & J Aromatics.
++ We further find from the Appeal paper book that the information given by Railway Authorities is general information in respect of entire Gutkha booked at Agra Railway Station and that information does not indicate that said goods were manufactured by M/s P & J Aromatics. The entire demand on the basis of information given by Railway Authorities that 40553 bags of Gutkha were clandestinely removed is not established.
++ We also find that Raw materials cannot be confiscated under Rule 25 of Central Excise Rules, 2002.
The duty demand of Rs.13,06,19,045/- was set aside along with penalties and interest. The personal penalties were also set aside along with the order of confiscation of raw materials viz. lamination and outers.
The appeals were allowed with consequential relief.
(See 2016-TIOL-3366-CESTAT-ALL)
