Tribunal sets aside order, remands for re-determination of weight increase formula.

The Tribunal allowed both appeals filed by the appellant, setting aside the impugned order and remanding the matter to the Commissioner for re-determination of the weight increase quantity based on the formula provided by the Settlement Commission. The appellant successfully argued against the reliance on the Shriram Institute for Industrial Research's formula, which had been rejected for an earlier period. The Tribunal emphasized the need for adherence to the Settlement Commission's formula in determining the weight increase resulting from the addition of water to lime during the manufacturing process.

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Issues:
- Appeal against O-I-O No. 49-52/PKJ/CCE/Adjn/09 and O-I-O No. 07/2011 dated 21.12.2011
- Allegation of clandestine removal due to increased weight of product
- Reliance on Shriram Institute for Industrial Research's formula
- Settlement Commission's rejection of the formula for earlier period
- Request to set aside the impugned order

Analysis:
The appeals were filed against O-I-O No. 49-52/PKJ/CCE/Adjn/09 and O-I-O No. 07/2011 dated 21.12.2011 by the appellant, concerning the period from April 2006 to March 2010. The issue in both appeals was identical, related to the alleged clandestine removal due to an increase in the weight of the tobacco product (Khaini) manufactured by the appellant. The Commissioner contended that water added to lime during the manufacturing process increased the weight, which the appellant failed to account for. The department relied on the report of Shriram Institute for Industrial Research to support their case for clandestine removal. The appellant had previously settled a dispute for an earlier period with the Settlement Commission but contested the current period before the Tribunal.

During the proceedings, the appellant's counsel argued that no search or examination of transporters or buyers had taken place during the period under consideration, thus no case of clandestine removal could be established. The counsel cited various case laws to support the argument, emphasizing the lack of evidence supporting the department's claim. On the other hand, the Revenue's representative supported the impugned order.

After hearing both parties and examining the records, it was noted that the Commissioner had relied on the formula provided by Shriram Institute for Industrial Research regarding the weight increase due to water added to lime in the manufacturing process. However, the appellant pointed out that the Settlement Commission had rejected this formula for the earlier period, providing a detailed explanation regarding the calculation of raw tobacco weight excluding snuff content. The Tribunal, respecting the Settlement Commission's formula, set aside the impugned order and remanded the matter to the Commissioner for re-determination of the increased weight quantity based on the prescribed formula, with an opportunity for the appellant to present their case and admit fresh evidence if necessary.

In conclusion, both appeals filed by the appellant were allowed by way of remand, emphasizing adherence to the formula provided by the Settlement Commission for determining the weight increase due to the addition of water to lime during the manufacturing process.

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