TaxTMI 
TaxTMI 
1995 (5) TMI 137
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.... unsorted Tea. 3. The management of the appellants' factory suspected theft on 30-1-1990 with respect to these Tea and informed Police on 28-2-1990. They informed the Excise Officers about the same on 8-3-1990. The said shortage of huge quantity could not be removed and the Department could not deem it as theft and it is the case of the Department, that the chance of alleged theft is remote as the factory is surrounded by security fencing along with chowkidar posted there and the keys of the factory were kept with the Assistant Manager of the factory. It was also found during further investigation that a huge stock of 40,576 Kgs. of material which was neither tea nor waste was found in the factory and the said stock of material on chemical test, was found to be spent tea along with foreign materials. It is the case of the Department that the said stock of spent tea along with the foreign materials were kept inside the factory to make up the shortage of tea which was clandestinely removed. Accordingly, a show cause notice dated 11-6-1991 was issued to the appellant Company, alleging clandestine removal of the above-said quantity of tea found short and they were asked to show c....
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.... 2(f) makes it clear that tea does not become excisable before it reaches the stage of sorting. In this case, it was contended, since the goods in question is an unsorted tea the same is not liable for duty. 6. Learned Junior Departmental Representative, Shri B.B. Sarkar for the Department contended before us such a plea was neither taken in the reply to the show cause notice nor before the Adjudicating Authority nor in the appeal proper before the Tribunal. Therefore, this plea requires investigation into the facts and the same cannot be allowed to be taken for the first time in the argument. 7. We have considered the submissions of both sides. It is now admitted by the learned Advocate, Shri, J. Ghosh that this plea was not taken in reply to the show cause notice nor in the Adjudicating Proceedings. A perusal of the proceedings also goes to show that such a plea was taken for the first time before us. Ld. Advocate, Shri Ghosh stated that this is a point of law which can be agitated at any time. But this point requires investigation into the facts and such a plea which requires investigation into the facts in the process of manufacture of tea and which is raised in the....
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....ade to the decision of the Madras High Court in the case of C.I.T. v. A.C. Paul, reported in 142 ITR 811 wherein it was held by the Madras High Court that - "The Tribunal is an independent arbitral Tribunal. The proceedings before it are adversary proceedings in which the Department, on the one side, and the assessee on the other, face each other as appearing parties. In such a situation, the Tribunal has to decide only those issues which are properly raised before it by the one or the other party in the appeal or in the cross objections." It was further observed that - "This, however, does not mean that the Tribunal has got to take upon themselves the responsibility of finding facts or of points of law which are not urged by the Department or the assessee, as the case may be." 8. Even otherwise, it is seen that Chapter Note 2 is only an inconclusive definition which states that blending, sorting or packing shall amount to manufacture. That does not mean that these processes necessarily have to be carried out in order to bring the Tea in question as one of manufacture. In such circumstances, this plea of the learned Counsel, Shri Ghosh cannot be sustained. 9. The next....
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.... to be dealt with according to the provisions of the Rules or the Act as if he had removed the goods himself. Therefore, even though the Assistant Manager and the previous Manager had removed the goods in contravention of the Rules, the company is liable for the same as if the company had removed the same by virtue of Rule 225 of the Central Excise Rules, 1944. In such circumstances, the question of remitting the duty under Rule 147 does not arise in this case. In a decision reported in AIR-1961 AP 350 in the case of Bir Bahadur Rice and Oil Mills v. Collector, the Hon'ble Andhra Pradesh High Court has held that under Rule 225 a producer or a manufacturer can for the breach of the Rules committed by the employees, be held liable for offence and penalty under the Act. It was held that this Rule clearly puts the master principally liable for the breach of the Rules though actually committed by his employees. The scheme of the Central Excises and Salt Act, 1944 and Rules, 1944 thereunder, as clarified by Rule 225, is that the manufacturer i.e. the person who actually manufactures excisable goods, is liable to pay excise duties as these goods are manufactured by the appellant Company a....