AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (7) TMI 759
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....he main appellant. The main appellant is engaged in the manufacture of pan masala (chewing tobacco) liable to Central Excise duty. In the March, 2005, the Officers of DGCEI conducted search and verification in various premises of the main appellant and connected places. After follow-up investigation, the proceeding were initiated against various persons including the present two appellants. The case was adjudicated by the Commissioner, who confirmed the Central Excise duty liability of Rs. 89,24,215/-. Equal amount of penalty was imposed on the main appellant under Section 11AC of the Central Excise Act, 1944. A further penalty of Rs. 23.00 lakhs was imposed on Shri P. Gopala Krishna under Rule 26 of the Central Excise Rules, 2002. The Orig....
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.... has been established with any corroborative evidence. The private records indicate the stock of packing materials for various brands of pan masala. In fact, there were many brand names indicated in the loose sheets of private records, which cannot be linked to the main appellant as they are not manufacturing such brands. No evidence was brought out by the Revenue regarding source of purchase or movement of packing materials, other main raw materials, like tobacco etc. to the manufacturing premises of the main appellant. Shri P.Someswar, who is held to be a job worker of the main appellant, has been let off in the adjudication by the original authority. Apparently, the private records recovered from the residence of Shri P.Someswar, is the ....
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....ngs. The ld.Counsel also relied upon certain case laws in support of the submissions. 4. The ld.A.R. for the Revenue reiterated the findings recorded in the original order. He submitted that the main appellant has admittedly indulged in the clearance of excess pouches along with accounted product. This has been established by the admission of the proprietor as well as by the various traders. Now, it is not open to the appellant to state that such excess clearance, were only from 2003. In the face of available corroborative evidence, the demand for the unaccounted pouches cleared is sustainable for a full five years period. Regarding private records for packing materials, the ld.A.R. submitted that these records were recovered from the resi....
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....m whom such packing materials were to have been purchased is also not known. No enquiry seems to have been made to ascertain the actual existence of such packing materials at any point of time, either with the main appellant or with the job workers. The movement of packing materials, if any, is not evidenced. Above all, even author of entries made in such private records, is not known. This puts a big question mark on the relevance of the said private records. 6. It is relevant to note that even considering the packing materials as one of the raw materials, it is not clear how the procurement of tobacco, which is required for manufacture of excisable pan masala has been evidenced. Further, it is also noticed that the private records indica....
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....sence of any cogent corroborative supporting evidences. 8. Regarding the excess clearances of dutiable pan masala over and above the declared quantities, we find that the said fact has been admitted not only the main appellant, but also by various dealers, who dealt with the said items. The only dispute is whether the demand for such excess clearance can be made from September, 2000 or is to be restricted from 2003 only, as claimed by the appellant. We note that the admitted facts corroborated by the dealers indicated to the evidence of un-accounted clearance of excess amount of pan masala pouches over and above recorded quantity. In such situation, it is for the main appellant to establish with supporting evidence to the effect that since....
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....ld that these were non-duty paid items. When the products was stated to be damaged items, the question of their marketability as excisable goods has to be examined. The same has not been done by the original authority. He made a summary conclusion that the duty paid nature of the said product has not been established. We note that if the product is not fit for market, the duty paid nature or otherwise of the same is of no relevance. Accordingly, we hold that the confiscation ordered on the above two items is not legally sustainable. 11. The second appeal is by Shri Gopala Krishna against imposition of penalty on him in terms of Rule 26 of the Central Excise Rules, 2002. We note that the said Rule is for imposition of penalty on any person ....