Tribunal rules in favor of appellant due to lack of evidence, deems show cause notice vague.

The Tribunal ruled in favor of the appellant, finding insufficient evidence to support the Revenue's claim that the seized DMO was in a marketable stage. The show cause notice was deemed vague and untenable, leading to the impugned order being set aside, with consequential relief granted if applicable.

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Issues:
1. Whether duty was rightly demanded on the 71 drums of DMO found in the factory premises during an inspection.
2. Whether the DMO was in a marketable stage and liable for duty, or was part of work in progress not yet ready for sale.

Issue 1 Analysis:
The appellant, a manufacturer of Menthol/DMO, challenged the duty demand on 71 drums of DMO found during an inspection. The Revenue alleged that the DMO was unrecorded intentionally to evade duty. The appellant argued that the DMO was part of work in progress and not finished goods. They explained that DMO arises as a by-product in the manufacture of menthol crystals and is further usable for more menthol crystals. The appellant claimed that not all types of DMO were marketable, and further processing was needed. They requested testing the seized DMO against market samples, which was not done. The Tribunal found lack of evidence supporting the Revenue's claim and deemed the show cause notice vague and untenable. The appeal was allowed, setting aside the impugned order.

Issue 2 Analysis:
The key question was whether the seized DMO was in a marketable stage, attracting duty, or part of work in progress. The appellant contended that the DMO required further processing before becoming marketable. They detailed the multi-stage process needed to make the DMO sellable, emphasizing that it was a trade practice to refer to both raw and treated oil as de-mentholized oil. The appellant highlighted that they only processed DMO for sale when orders were received. The Tribunal noted the lack of concrete evidence supporting the Revenue's claim that the DMO was marketable. Additionally, the absence of attempts to remove the DMO clandestinely from the factory premises further weakened the Revenue's case. The Tribunal found the show cause notice lacking in substance and allowed the appeal, providing consequential relief.

In conclusion, the Tribunal ruled in favor of the appellant, emphasizing the lack of evidence supporting the Revenue's claim that the seized DMO was in a marketable stage. The Tribunal found the show cause notice vague and untenable, ultimately setting aside the impugned order and providing consequential relief if applicable.

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