TaxTMI 
TaxTMI 
2012 (12) TMI 346
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....hiva Export Corporation Ltd. ("SECL" for short) Baddi Himachal Pradesh; (v) M/s. Neeru Enterprises, ("NE" for short), Rampur U.P. (vi) Shri. Viny Aggarwal, Partner of AI (vii) Shri. Manish Jain Partner of AI (viii) Shri. Sanjay Sighal, Managing Director of SMIL and SAIL 3. The four Applicants mentioned at (ii) to (v) are buyers of excisable goods from AI, the applicant at S. No. (i). Subsequent to the period of dispute SMIL and SAIL have merged and only SMIL exists now. SECL and NE are also buyers of products from AI though in much smaller quantities than in the case of SMIL and SAIL. The status of the three individuals who are applicants before us are indicated above. 4. AI are registered with Central Excise authorities for manufacture of Menthol, De-Mentholised Oil, Mentha Oil, Distilled/Filtered Mentha Oil Shivalik, Distilled/Filtered Spearmint Oil, Distilled/Filtered Piperita oil, Distilled/Filtered Thymol, Distilled/Filtered Lemon Grass Oil and Distilled Peppermint Oil. The main raw materials for manufacture of these products are Crude Mentha Oil, Crude Mentha Oil Shivalik, Crude Tymol Oil, Crude Spearmint O....
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....9-4-2005 to 22-6-2006 proposing to recover the duties refunded to AI under the provisions of Notification No. 56/2002-C.E. and also for recovering the Cenvat credit availed by the buyers on the strength of invoices issued by AI. Thus the Revenue is proposing to recover the same amount both at the end of AI and at the end of the buyers shown in the invoices issued by AI. 8. According to AI the processes said to be undertaken by AI can be divided into two stages. In the first stage, Menthol and De-mentholised oils are manufactured from crude oils. The processes involved in the manufacture of these items are very simple it involves cooling of Crude Mentha Oils and thereafter centrifuging it to separate the products. This stage of the manufacture does not involve much investment in machine. 9. They are also engaged in a second stage of manufacture namely, the fractional distillation of Mentha Oils and DMO to produce distilled fractions of such oils. This process needs distillation columns which require more sophisticated machinery and higher level of investments. 10. AI claims that they were mainly doing the first stage of producing Menthol and DMO and clearing ....
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....e which is necessary by-product that emerges in fractional distillation of the oil. (8) The seizure of 1,85,580 Kgs. of Mentha Piperita Oil, 9000 Kgs Spearmint Oil, 3,97,620/- Kgs. Terpene and 39,860/- Kg. Menthol and-its derivatives from the godown of SMIL. Terpene stored here shows that processing activity was done by SMIL and SAIL but these units were claiming that they were not processing" any crude oil. The facts that Terpene was seized from them and production and sales of expected quantity of Terpine was not seen at the end of AI demonstrate the fraudulent nature of the claim of the parties. (9) There was discrepancy between the manufacturing process as stated in the certificate issued by the District Industries Centre, Jammu and as explained by Shri Kartar Chand on 22-5-2008. Such discrepancy occurs only because the whole claim of manufacture was only a fictional claim. (10) Shri Kartar Chand, Factory Manager of AI, in his statements dated 28-2-2007 and 17-9-2007, stated that distillation columns that AI had were not capable of distilling Piperita Oil and crude Mentha Oil (Shivalik). So AI never manufactured any....
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....the amount in question is demanded from AI as also the buyers of the product which is prima facie not maintainable. 17. SMIL made the following submissions,- (a) Though the proceedings originated from certain seizures of crude Mentha Oils and terpenes from their godown away from the factory, the adjudicating authority has held that he was not relying on the said seizures. So the seizures cannot be taken into account for deciding their appeal. (b) The panchnamas drawn at AI clearly establish,- "(i) that Amarnath was engaged in the process of fractionation of menthol into DMO/DFPO, and had all the wherewithal and machinery therefor, (ii) that all statutory records relating to such manufacture and clearance had also been seized from Amarnath but were suppressed from SM and SA despite a specific request therefor having been made before the CCE. (iii) that all records were, found to be in order at Amarnath, SM and SA, and (iv) that no crude oil whatsoever was fond in the premises either of SM or of SA - neither is there any such finding ....
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....n Jammu. 20. The adjudicator has made a remark in para 53 at page 227 that the seizure of crude oils from the go-downs of applicants namely SMIL and SAIL is not relevant to the case, though mentioned in the Show cause Notice being adjudicated. But we find that it is a relevant fact. The finding adjudication of the Show Cause Notice in that matter is not before the Tribunal during this proceedings, 21. We have considered the facts as brought out both sides and listed above and also the arguments on both sides. 22. The arguments raised by the applicants about the jurisdiction of the investigating authority namely, DGCEI, New Delhi to investigate the matter and the Commissioner (Adjudication), New Delhi to decide the Show Cause Notice has been recorded in paras 32 and 33 at pages 218 and 219 of the impugned order. These issues, though seen recorded in the appeals, were not argued during the hearing. So we are not dealing with this issue at length. 23. We are also not agreement with the argument of AI that refunds granted through an order original cannot be recovered without filing appeals against such orders. This argument applies where the refund is so....