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TaxTMI 
1999 (5) TMI 258
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....fore us are M/s. Jupiter Tobacco Industries Pvt. Ltd., Ganapathy Traders and Shri Sudhi Singh. The department has raised the demands on 5 grounds. These grounds and the value of cigarettes and duty is brought out by appellants in their written submissions which is noted herein below :- Break-up of duty confirmed Value  Duty  A. Shortage of physical stock of 22 CFCs of cigarettes in BSR found on verification of BSR stocks with RG1 Register 82,236/-  66,000/-  B. 197 CFCs cigarettes were seized since they were not covered by any duty paying documents and as there were no serial numbers on them 9,98,040/-  7,76,280/-  C. Cigarettes manufactured and cleared without payment of Central Excise duty on account of addition of rip-tobacco of 4 kgs. per bag of cut tobacco shown to have been used in the manufacture of cigarettes 85,08,723/-  2,07,96,797/-  D. Cigarettes manufactured and cleared without payment of Central Excise duty in respect of the quantity of cut tobacco shown to have been used in the balance sheet of M/s. JTIPL for the financial year 1991-92 7,68,204/-  1....
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....en the statement of the General Manager, Shri Sajjanraj Bohra did not reveal that there was excess of 4 Kgs. per bag of cut-tobacco during the period of manufacture from 1991 to June, 1994. The Commissioner ought to have analysed the entire findings on record including the various registers maintained by the appellants and should have come to the conclusion as to how there could be such clandestine removal to an extent of evasion of duty of Rs. 2,07,96,797/-, when the entire factory was under physical control and each of the processing register was being checked and signed by the concerned departmental officers. He submits that the findings given on this aspect of the matter is totally non-speaking and nothing emerges from the said paragraph to show that there was clandestine manufacture or removal of goods to the extent indicated. 6. As regards the confirmation of demands in Item (D) (to the extent of Rs. 18,82,896/-) is concerned, learned Counsel points out that this demand was raised on the basis of balance sheet for the Financial year 1991-92 wherein the quantity of cut-tobacco had been shown. It is his submission that balance sheet indicated all those quantities were o....
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....nt. He submits that for alleging clandestine removal , there has to be enormous funds of more than Rs. 1 crore which is not reflected in the balance sheet. He further submits that registers during the relevant period were all scrutinized and checked and same merely disclosed that there was no clandestine removal. He submits that the basis for making the claim of clandestine removal is weighment of one bag only which had excess of 4 Kgs. of cut tobacco. This cannot be the basis for the alleged clandestine removal for a period in question as there has to be sufficient evidence on each point and the department has not produced the same. He submits that the case is built on presumptions and assumptions and not on any evidence. He submits that there are no incriminating documents or statements of any person to indicate manufacture or clearance and such an order is not a speaking order. Therefore, he seeks for complete waiver and stay and remand of the proceedings. 10. Learned Advocate further submits that out of Rs. 1 crore penalty, Rs. 60 lakhs has been imposed under Rule 52A (8) which was not in existence during the relevant period. Therefore, at this stage itself, this order ....
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.... he submits that the said 197 CFCs cigarettes were seized from the traders whose goods were relatable to the supplies made by the appellants only and also submits that the goods did not have serial numbers on them. The traders had not said anything about the duty paying documents. 16. As regards major demands in Item (C), it is his contention that appellants had themselves admitted about excess of 4 kgs per bag of cut tobacco. Therefore reasonable belief can be drawn that such excess was in each of the bags during the relevant period and demands made for the said period amounting to Rs. 2,07,96,797/- is required to be accepted. He submits that there was utilisation of 16,000 bags during the relevant period. He further submits that the statement of Shri Sudhir Singh would show that the balance sheet and the conclusion arrived at by the department is required to be accepted. 17. He submits that the demands made in (E) is required to be confirmed as GTC did not have any other supplier other than the appellants and the Commissioner had given detailed findings on this aspect. He therefore, submits that the balance sheet for 1994 thus indicate the appellants' holding the ....
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....ore the Investigation officers. The Commissioner ought to have examined the issue in great length but instead has rejected it without detailed findings. 20. The second demand in Item (B) pertains to the visit of the officers to the premises of Ganapathy Traders. Ganapathy Traders have stated that they have not been receiving the goods from the appellants. This has been supplied to them through various sources and ultimately the source is the GTC industries. There has to be clear cut findings as to how the cigarettes seized from the traders could be said to have been received by the traders from the appellants' factory. On prima facie perusal of the records, there is nothing to indicate that appellants directly had sent these goods to the traders. If this was the case, then the Commissioner ought to have examined this issue and shown as to how 197 CFCs cigarettes were directly received by the traders from the appellants which is strongly denied. The basis for denial is that all the stocks are cleared from the factory on payment of duty directly by GTC. It is GTC who had been distributing the same to various traders through their wholesale distributor. Therefore to come to th....
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....ave been examined and seen as to how this 4 Kgs. could be added in every stage of production. No such analysis has been done. Hence, merely to conclude that one bag at the time raid had excess 4 Kgs. of cut tobacco and therefore during the relevant period 16,000 bags had such excess of 4 Kgs. and therefore the findings that there was clandestine manufacture and removal is totally presumptions and it is not acceptable in the eye of law. The department ought to have shown that each and every bag which was removed legitimately after recording the details in the register was not utilised in the manner in which it ought to have been done. The department ought to have shown as to how the excess quantity had been received and the same had been removed for production without entry in Registers; the manner of excess of production and the manner of clandestine removal and sale should be brought on record. There is nothing on record from the order that final product to an extent of Rs. 85,08,723/- on which this duty has been raised were sold to a particular individual or several of them and to whom sold and who had received the goods. There is no findings as to who had removed this from the f....