TaxTMI 
TaxTMI 
2010 (11) TMI 275
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....of the respondent company), it is clearly admitted that the company is engaged in manufacture of Gutkha and selling products under the Brand "Shimla" and further when dispute in this case also related to same goods or brand name "Shimla", whether Tribunal was justified in ignoring this material piece of evidence for not implicating the respondent-company in respect of the transaction in question? (3) Whether, the statement of Nitesh Wadhwani is sufficient to initiate action against the respondent in respect of the goods in question under the Act and pass appropriate penal orders? 2. In brief the respondent is manufacturer of Gutka Pan Masala, Mouth-Freshner, Sweet Supari etc. under the Brand name of "Shimla", "Malikchand" and "Vansh" having its Industrial Unit at Indore. In the search conducted on 21-5-2004 against M/s. Kuber Group of Companies, the Excise Department had detained a Container at Chennai, containing 40 bags of "Shimla" Brand Gutkha valued at Rs. 8,73,600/- (MRP). The consignments was booked by M/s. Vaishali Cargo Carriers, New Delhi consigned to "Self" at Chennai, through M/s. Balaji Cargo Forwarders, Delhi also having their office at Chennai. The Vaishal....
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....der :- 3. The First substantial question of law : Learned counsel appearing for the appellant submitted that the Tribunal as well as the authorities have committed an error in dropping the proceedings against the respondent and in not fastening the liability of payment of excise duty and penalty. Learned counsel for the respondent submitted that there is no evidence that the respondent had manufactured and cleared the goods in question without payment of excise duty, therefore, the Tribunal as well as the Commissioner has not committed any error in dropping the proceedings against the respondent. He further submitted that since the appeal does not involve any question of law, therefore, no interference of this court is required. 4. So far as the objection of the respondent that no question of law is involved in appeal is concerned, though the authorities as well as the Tribunal have concurrently found in favour of the respondent, but a perusal of the three questions formulated by this Court indicates that these are the substantial questions of law, which arise for consideration in this appeal. 5. Though the respondent is the manufacturer of "Shimla" brand of Gutkha, ....
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....ented the excise authorities from verifying their allegation from the record, which was seized from the respondent. 6. The Deputy Commissioner Customs and Central Excise Division, Indore by the order dated 30/31 August, 2005, found that :- "3. In the instant case, I find that no GRS & Challans were recovered from the premises of M/s. Vaishali Cargo Carrier, Chennai premises at which the seized goods container was detained. And from the statement of Shri Singh, Manager and of Shri P.S. Vijay Kumar, Delivery Assistant, both of M/s. Balaji Cargo Forwarders, Chennai what transpire is that as the product Gutka which is banned in the State of Tamil Nadu, is transported and unloaded in the State in the guise of Hardware goods with fake LRs. While the impugned goods have been placed under seizure of the allegations that the said goods appeared have been cleared without payment of appropriate Central Excise Duty from the factory premises of the Notice. To this, I find that no record, whether oral or documentary has been brought on record or has been adduced before me, to establish that the said goods were manufactured and cleared by the Noticee without payment of app....
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....ntral Excise Rules in the instant case, hence are not liable to any penalty under Rule 25 of the Central Excise Rules, 2002". 7. The said reasoning and finding of Deputy Commissioner has been maintained by the Commissioner Appeal and CESTAT. The CESTAT also found that :- "5. I have carefully considered the submission from both the sides. The factory of the respondent is at Indore, in which they manufacture among other item, "Shimla" brand Gutkha. The container from which the 40 bags of "Shimla" brand Gutkha were recovered had been interecepted at Chennai and the same had been booked by Ms. Vaishali Cargo Carrier through a freight forwarder M/s. Balaji Cargo Forwarders, Delhi but it could not be ascertained as to who had booked this consignment. I find that as such there is no evidence indicating that the goods in question, had been booked by the respondent through Balaji Cargo Forwarders and the same had been clandestinely cleared by the respondent without payment of duty. In absence of such an evidence, the proceedings for confiscation of goods, demand of duty in respect of the same and imposition of penalty on the respondent has been rightly dropped by the Deputy Comm....
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....yarn has been sold and how the same was removed clandestinely from the factory premises of the appellant. In the absence of any such material, the findings of the adjudicating authority and the Commissioner (Appeals) that the entire yarn has been cleared clandestinely without payment of duty cannot be sustained. Not even a single document has been produced in order to establish that the yarn after manufacture, was cleared without payment of duty in the home market. A perusal of the export documents clearly shows that the yarn after manufacture was used in knitted garments which were subsequently exported by the respondent in order to discharge their export obligations under the advanced licence scheme. The Hon'ble Apex Court in Oudh Sugar Mills's case (Supra) had clearly held that duty cannot be confirmed on the basis of mere suspicion, howsoever, strong it may be." 11. In the matter of State of West Bengal and Others v. Md. Khalil reported in (2000) Vol 4 SCC 594, the Supreme Court while examining the issue of levy of entry tax when the taxable goods were found in possession of the assessee, but there was no evidence that the assessee had brought the goods into the concerned....
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.... establish that the excisable goods was produced or manufactured by the assessee concerned and for attracting Section 11-A, it is necessary to establish that the excisable goods was clandestinely removed without payment of excise duty, which the revenue in the present case has failed to establish. The excise duty cannot be levied merely on the basis of assumption or presumption. 13. In the present case, it is clear that the revenue has failed to produce even a single piece of evidence that the seized goods were manufactured by the respondent or they were clandestinely removed without payment of excise duty from the factory premises of the respondent. The revenue has sought to levy excise duty and penalty on the respondent merely on the basis of assumptions and presumptions and such a course is not permissible in law. Thus, first question is answered by holding that for want of evidence, the Tribunal was justified in not fastening the liability on the respondent and dropping the proceedings against him. Substantial Questions of law No. 2 and 3 14. These two questions of law are based upon the statement of Nitesh Wadhwani, proprietor of the respondent company recorded by....