TaxTMI 
TaxTMI 
2016 (3) TMI 667
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....ase relevant to the present appeals are that the appellants are engaged in the manufacture of gutka liable to central excise duty. Based on the certain intelligence, the central excise officers intercepted a vehicle on 10.10.2002 and thereupon conducted detailed investigation regarding the unaccounted non-duty paid clearance of gutka by the main appellant. (M/s. PNG Auromatics). On conclusion of the investigation, show cause notice dated 28.05.2004 was issued to demand central excise duty of Rs. 1,31,51,268/-. Penalties under various provisions of Central Excise Act were proposed on various persons. After due process, the impugned order was passed. The ld. Commissioner confirmed the duty demand, imposed equal amount of penalty and further p....
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....ons, whose statements were relied upon were conducted as requested by the appellants. There is a factual error in the observation of the Original Authority that two of the employees are not available for cross-examination as the letters sent to them have returned un-delivered. However, it is seen that two of the three witnesses, whose cross-examination could not be held on 24.01.2007 have participated in the adjudication proceedings. (iv) The retractions made by the persons, who gave earlier statements have not been considered and analysed by the Adjudicating Authority. (v) Regarding procurement of packing materials from M/s. Sandeep Laminators, it is clear that the Director of the Company categorically stated ....
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....ere 24 workers and 9 machines. It has also been admitted that they are using the name of M/s.S.R. Packers for clearing the goods. They destroyed these bills after clearance. It is admitted by the proprietor that the same number is used in two bills and they used 100 such bills to effect clearance without payment of duty. The statements of Proprietor and Manager of the appellant company will clearly establish that the appellants were engaged in clandestine manufacture and clearance. Regarding the quantum of duty demand, ld. AR submitted that the details are given by the Original Authority in page 37 at para 37 (iv) of the impugned order. The calculation of duty demand has been shown in Annexure A to the show cause notice. Ld. AR submitted th....
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.... 1,31,51,268/-. The said amount has been confirmed against the appellant. Without going into any detailed analysis of other aspects of the case, a preliminary look at the contents of the above Annexure-A will make it clear that the whole demand is simply made on fictitious, presumptive calculation. It is not clear as to how based on an average of various bills which themselves are presumed in nature, a duty calculation can be arrived at for demand. Further, it is seen that goods under 100 such bills were presumed to have been cleared clandestinely and accordingly, the average amount is multiplied by 100. We are unable to appreciate that such summary, arbitrary calculation without any supportive evidence, reason or logic or legal principle c....
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....pellant started with recovery of one cash/credit memo no.51 dated 10.10.2002 along with 25 bags of gutka in a vehicle. On a follow-up, another cash memo with the same no. but with a different date (9.10.2002) covering 40 bags of gutka was found. Thereafter, various statements were recorded Based on the admission that the appellants used to issue bills with the same no. twice; 25 bags to 40 bags of gutka were sent through these bills; 100 such bills would have been used for clearance without payment of duty, the whole calculation of duty demand has been made. 10. As already mentioned, such admission even taken as true reflection of the events does not throw light on whether 25 bags or 40 bags of gutka covered by each bill; whether "JEET" ....
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....e the clandestine removal and thereby the demand for duty. As far as these two bills, the appellants have already accepted the liability and duty has been paid. We find that projecting the fact of these two bills to 100 such bills, without semblance of evidence will amount to arbitrary action not sustainable under law. 11. We have also perused the various case laws referred to by the appellants. In Kuber Tobacco Products Ltd. - 2013 (290) ELT 545 (Tribunal-Delhi), the Tribunal held that the requirement is cogent evidence of unaccounted receipt and consumption of basic raw materials and packing materials required for manufacturing alleged quantity of unaccounted finished goods. The decision of the Tribunal was later upheld by the Hon'ble ....