2007 (6) TMI 399 - AT - Central Excise

Commissioner denies excess set off claim for cigarette manufacturing due to lack of evidence supporting increased tobacco consumption.

The Commissioner (Appeals) upheld the rejection of the appellant's claim for excess set off under Notification No. 355/86-C.E. for manufacturing ... Set off - Additional consumption of cut tobacco in manufacture of cigarettes, claimed Issues involved:Excess set off claim under Notification No. 355/86-C.E.Analysis:Issue 1: Excess set off claim under Notification No. 355/86-C.E.The appeal pertains to the appellant's claim of excess set off under Notification No. 355/86-C.E. for the manufacturing of cigarettes. Initially, the appellants claimed set off for 784.30 gms but later asserted the use of 816 gms of cut tobacco for the same quantity of cigarettes. A show cause notice was issued, and after adjudication, the claim was rejected. The Commissioner (Appeals) dismissed the appeal, leading to the matter being brought before the Tribunal. The Tribunal, in a previous order, set aside the decision and remanded the case back to the Commissioner (Appeals) for fresh consideration. The current Commissioner (Appeals) also found the appellant's claim unjustifiable regarding the additional consumption of cut tobacco. The appellant argued that the earlier decision favored them on the question of consumption but was rejected on the grounds of unjust enrichment. However, the Commissioner (Appeals) in the current order upheld the rejection, stating that the appellant failed to provide evidence to support their claim of increased tobacco consumption.Issue 1 Analysis Continued:The Tribunal's order set aside the previous decision due to the failure to consider the applicability of Notification No. 355/86-C.E. The Commissioner (Appeals) in the subsequent order emphasized the lack of evidence submitted by the appellant to support the higher consumption of cut tobacco. The Commissioner highlighted that the increased consumption was not substantiated by any records or evidence, and the appellant failed to establish either higher production or an increase in net weight of the manufactured product. The appellant's argument that the set off should be based on the quantity of cut tobacco issued rather than the actual quantity used was deemed unsubstantiated. The Commissioner found the Order-in-Original sustainable, as the appellant could not provide any evidence supporting their claim of using 816 gms of cut tobacco for manufacturing cigarettes.Issue 1 Conclusion:In conclusion, the Commissioner (Appeals) rejected the appellant's appeal, stating that in the absence of evidence demonstrating the consumption of 816 gms of cut tobacco for manufacturing 1000 cigarettes, the order-in-appeal was well-reasoned. The appellant's failure to produce any records or evidence supporting their claim led to the dismissal of the appeal.