TaxTMI 
TaxTMI 
TaxTMI 
2012 (7) TMI 830
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.... the appellant where the same was mixed with shredded tobacco leaves/flakes to make branded chewing tobacco, which was being sold under brand name Tulsi Zafrani Zarda. During the period of dispute i.e. during period from April 1994 to October 1996, the appellant were clearing the kimam to their other units without payment of duty. The department issued a show cause notice dated 19-6-1997 alleging that this product is excisable and chargeable to Central Excise duty under Tariff Heading 2404.49 prior to 23-7-1996 and sub-heading 2404.40 thereafter. The show cause notice sought recovery of Central Excise duty amounting to Rs. 16,91,79,394/- and also imposition of penalty. The show cause notice was adjudicated by the Commissioner of Central Exc....
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....remanded the matter to the Commissioner. The appeal filed by the appellants before the Apex Court was dismissed vide judgment dated 21-4-2005 reported in 2005 (183) E.L.T. 241 (S.C.), wherein the Apex Court upheld the Tribunal's findings with regard to excisability of kimam and also on the question whether extended period for recovery of non-paid duty would be available to the department. The Apex Court also affirmed the Tribunal's order regarding remand of the matter to the Commissioner for examining the question of applicability of exemption Notification No. 121/94-C.E. and also the related question of quantum of penalty and redemption fine. Accordingly, the matter was adjudicated de novo by the Commissioner vide order-in-original dated 3....
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....or hearing on the question of penalty today. 1.3  Accordingly, this matter was heard today on the question of penalty of Rs. 2,00,00,000/- imposed on the appellant firm under Rule 173Q(1)(d) of the Central Excise Rules by the impugned order. 2. Heard both the sides. 3. Shri T.R. Rustogi, Advocate, the learned Counsel for the appellant, pleaded that during the period of dispute the appellant were not paying duty on kimam being cleared by them to their own units under impression that the same is non-excisable, that other manufacturers of kimam were also following the same practice, that there was no intention on the part of the appellant to evade the duty as they were eligible for full duty exemption under Notification No. 1....
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....e Rules. During the period of dispute while Rule 173Q(1)(a) of Central Excise Rules, 1944 provided for penalty on any manufacturer, producer or registered person of a warehouse or a registered dealer for removal of any excisable goods in contravention of any of the provisions of Central Excise Rules, 1944 or the notification issued under these rules, Rule 173Q(1)(d) provided for imposition of penalty for contravention of any of the provisions of these rules or of the notification issued under these rules with intent to evade the payment of duty. The appellant's plea is that since there was no mala fide intention on the part of the appellant, the penalty of Rs. 2,00,00,000/- imposed on them under Rule 173Q(1)(d) of the Central Excise Rules i....
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....it in the above contentions. In this matter, we are concerned with the application of the above judgments to the facts of this case. The words "wilfulness" and "intent" in Section 11A are expressions of mental state at the time of manufacture and clearance of the goods. The situs of the levy of central excise is on manufacture. Pricing and value of clearances are matters specially within the knowledge of the assessee. As stated above, the assessee herein was in the business of manufacture of chewing tobacco and its preparations for last couple of years. In the course of business, the assessee had dealt with similarly situated traders. It was fully aware that those traders who produced similar compounds had their units licensed or registered....
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....liance of the rules under the said Act. In each of the decisions the findings indicate technical non-compliance and not total non­compliance of the rules. It was for the assessee to explain the basis of its alleged bona fide impression. In this connection, no evidence was put before the commissioner about receipt and utilization of the compound in the manufacture of Tulsi Zafrani Zarda. No evidence was led to show that the amount of proforma/Modvat credits was equal to the duty demanded, although it was urged that after 3/94, the liability to duty on inputs stood shifted to the final product. 25. Modvat is basically a duty collecting procedure which provides relief to the manufacturer on the duty element borne by him in respect of....