TaxTMI 
TaxTMI 
2013 (12) TMI 224
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....as not accounted for and the said stock was placed under seizure. The visiting authorities also find that out of 13847 Quintals of sugar, 3500 Quintal were of White Sugar and was liable to duty. On further investigation and recording of statements, the visiting officers found that appellant during the period 2002 to 2005 have, allegedly, manufacture white sugar on which duty is liable to be discharged but cleared the same as Khandsari Sugar claiming exemption. Investigating officers also noticed that there was machinery like Vacuum Pan which was found during the visit which was utilised for manufacture of white sugar. Coming to such a conclusion, show cause notices were issued to all the appellants herein. The said show cause notice directed the appellants as to show cause why there should not be demand of duty on the clearances of white sugar for the material period, interest thereof and penalties on the appellants, besides proposal for confiscation of the goods seized during the visit; show cause notice also proposed for demand of duty on the Molasses during the relevant period. The appellants contested the show cause notice on various grounds including seeking the cross-examinat....
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....ty seven lakhs ninety six thousand three hundred fifty two only) on M/s. SGSIK under Section 11-Assistant Commissioner of Central Excise Act, 1944 read with Rule 25 of Central Excise Rules, 2002. (vi) I impose penalty of Rs. 10,00,000/- (Rupees ten lakh only) on Shri Sadanad Zervar, Partner of M/s. SGSIK, Anand Bhavan, Pardeshi Pura, Nandurbar -425412, Maharashtra under Rule 26 of Central Excise Rules, 2002. (vii) I impose penalty of Rs. 10,00,000/- (Rupees ten lakh only) on Shri Devendra Pardeshi, Partner of M/s. SGSIK, Anand Bhavan, Pardeshi Pura, Nandurbar- 425412, Maharashtra under Rule 26 of Central Excise Rules, 2002. (viii) I impose penalty of Rs. 10,00,000/- (Rupees ten lakh only) on Shri Prithviraj G. Raghuvanshi, Partner of M/s. SGSIK, Anand Bhavan, Pardeshi Pura, Nandurbar- 425412, Maharashtra under Rule 26 of Central Excise Rules, 2002. Aggrieved by the above said order, all the appellants are before us. 4. Learned counsel appearing on behalf of all the appellants would submit that the adjudicating authority has erred in coming to such a conclusion. It is his submission that the appellant SGSI were registered with the Government of Gujarat as manufacturer....
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....anufacture of Khandsari Sugar and permission granted is also for Khandsari Sugar and the process flow chart which has been attached to the application made to the various statutory authorities of Govt. of Gujarat also indicate that the appellant had always manufactured Khandsari Sugar. It is his submission that the adjudicating authority has also violated the principles of natural justice by not granting any cross-examination of the witnesses whose statements were relied upon. It is his submission that Chartered Engineer was also summoned by the officers of DGCEI and statement was recorded on 12.04.2005 wherein he had stated that the test reports were incorrect. He would submit that the said Chartered Engineer by an affidavit dated 14.4.2005 has retracted the statement given and the said affidavit has been forwarded to the adjudicating authority which has not been considered. It is further submission that reliance placed by the adjudicating authority on the statements of the manufacturers of vacuum pan is also incorrect, inasmuch as, the supplier of the machinery was some other company and statement is recorded of another company with whom the appellant had no business transactions....
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....ction of White Sugar was undertaken by the appellant from 2002 onwards. He would also further submit that the certificates produced by the appellant from their buyers were an afterthought and after the departmental officers left on premises on 26.01.2005 and this is an evidence which has been created subsequent to the visit of the authorities and cannot be considered as an evidence. It is his submission that though there was an application made by the assessee for registration as a manufacturer of White Sugar on 05.01.2005, it is the case of the Revenue that they had in fact found that appellant was manufacturing and clearing White Sugar in the guise of Khandsari Sugar. It is his submission that impugned order be upheld and appeals be rejected. 6. We are given anxious consideration to the submissions made by both sides and perused the records. 7. The entire demand of duty is based on the findings that the appellant SGSI had manufactured White Sugar during the period 2002 to 2005. 8. At the outset we would like to record that the appellant had unrecorded 3500 quintals of White Sugar found during the visit of the investigating officer, which has not been disputed and the con....
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....In the case in hand, we find that appellants had submitted Form No.11 prescribed under Rule 61 of the Gujarat Factories Rules, 1967. On perusal of the said Form No.11 for the period in question i.e. 2002-2005, we find that the said Form No.11 specifically talks about testing of open pressure pan in the factory premises of the appellant for the period. It also indicates that said open pressure pan was not insulated. The said certificates up to 2004 were of open pressure pan. We find that from the year 2005, the said Form No. 11 specifically talks about vacuum pans which were insulated vessels and undisputedly can be used for manufacture of White Sugar. If the appellants factory did not have vacuum pan during the period 2002 to December 2004, we are unable to understand as to how the appellant can manufacture White Sugar. This evidence has been totally over looked by the adjudicating authority and hence the findings that the appellant were manufacturing White Sugar from 2002 to 2005 seems to be incorrect and misdirected. 10. Secondly, we find that DGCEI officers had sought the help of GPCB directing them to give Photostat copies of applications made by SGSI while taking consent f....
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....e samples which were tested by renowned institute like Vasantdada Sugar Institute. There is no dispute as to that the samples which were drawn and sent to the Vasantdada Sugar Institute, had specifically indicated that the samples of Khandsari Sugar complied with the specification of Khandsari Sugar. The goods which are found on the day of visit specifically indicate that there was Khandsari Sugar, the adjudicating authoritys order of demanding duty on the Khandsari Sugar is incorrect as there is no dispute that Khandsari Sugar is not dutiable. We find that the adjudicating authority has over looked the evidence of the analysis of the samples which were tested by Vasantdada Sugar Institute on the samples which were sent by DGCEI officers. 12. Fourthly, we find that appellant had produced various certificates from the purchasers of Khandsari Sugar during the material period. On mere perusal of the said certificates, which were produced before us to day and was produced before the adjudicating authority, we find that the purchasers have specifically stated that they were regularly procuring Khandsari Sugar from the appellant and were also dealing in sugar from various manufacture....