TaxTMI 
TaxTMI 
1998 (6) TMI 229
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....llants are manufacturers of `CHIK' brand shampoo classifiable under sub-heading 3305.90 of Central Excise Tariff Act. It is a private limited company registered under Companies Act. The Officers of the Preventive department visited their premises on 28-12-1992 and noticed that a strapping machine and a sealing machine for sealing carton boxes were functioning. Adhesive tapes of M/s. Beauty Cosmetics with the logo of Beauty Cosmetics Pvt. Ltd. were being used for the purpose of sealing was also noticed. The Officers also visited the premises of M/s. Rabbani Industries, M/s. Jeya Cosmetics and others manufacturing `Chick' brand shampoo. Certain incriminating documents were also seized. Further investigations were also conducted at the godown premises of M/s. KCPL, the suppliers of raw-materials and machinery to M/s. KCPL and incriminating documents found in the premises were seized. 3. The `Chik' brand shampoo pouches recovered from M/s. Jeya Beautics and pouches of M/s. Senthil Cosmetics recovered from M/s. Bharat Cosmetics were found to contain the logo `Mirror image of a face with rich growth of hair as seen in a fancy mirror' and with the markings `Marketed by M/s. Beauty C....
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....L., Sri D. Srinivasan supervised the production activities including mixing in required proportion, controlled the consumption of raw materials and issued release certificates which facilitated that the despatch of the goods from the units. The raw materials and the packing materials were supplied to the units by select suppliers. The suppliers of raw materials and packing materials were not known to the unit owners but they allowed credit to the units and supplied the raw materials and packing materials worth lakhs of rupees on credit. The unit manufacturers were not aware of the prices of the raw materials and packing materials. They admitted that the representative form M/s. KCPL negotiated with the suppliers of raw materials and packing materials could be supplied for the manufacture of `Chik' Shampoo. The variety and the price of shampoo so manufactured was decided only by M/s. KCPL. Therefore, on the basis of this material available and on the basis of clearances made by the appellants for the period March, 1991 to March 1994, the duty demand of Rs. 26,29,57,000/- was raised for the above period. 4. The department had not accepted that the units manufactured the items i....
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....ding Form XXVII for the year 1993-94, stock extract of the appellant, invoices showing purchase of raw materials, invoices showing clearance of manufacture of goods and relied on the submission of Sri Thirunavukkarasu, Godown incharge and also on the statement before the High Court. He submits that on this issue these material evidence have not been considered. He further submits that the second issue which has been pleaded specifically was as to whether the demand can be made on the basis of clearances of sample units. The department had taken 13 individuals as samples and held that there was clearances of all the units would be 400 to 500 for the relevant period. He submits that detailed statements had been given and there were 400 to 500 units which are manufactured the total amount of clearances on which duty had been demanded and the procedure adopted for totalling the clearances of units which existed during the period which is totally improper and unsustainable. 6. With regard to the third issue, the learned Counsel submits that the order is unsustainable as the demands were barred by time and in this regard he submits that each of the units were filing the declaration....
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....d not be disturbed with regard to reduction of duty demands and dropping of proceedings against the individuals. 10. The learned DR refers to the details in the order and submits that there was no infirmity and hence the order was not void or illegal order. The sample proceedings adopted by the department in examining the 13 units can be considered as fairly representative samples for the entire units of 400 to 500 manufactured during the period. It was not a mandatory requirement for the revenue to issue show cause notices to all the 13 units, as from the records it was very clear that the appellants were the manufacturers and other units there was no part of it. He therefore, submits that the matter need not be remanded for de novo consideration. 11. On a careful consideration of the submissions, we are of the considered opinion that at this prima facie stage that there are sufficient evidence have been led to show that there is violation of principles of natural justice, while passing the impugned order. Therefore, since the matter lies on a short compass, we take up the consideration of the main appeal itself, after granting waiver and stay of the amount confirmed. ....