TaxTMI 
TaxTMI 
2018 (7) TMI 1278
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....ise out of the same impugned order of the Commissioner vide which a demand of Rs. 2,40,50,000/- (Two crores forty lakhs fifty thousands) stands confirmed against Shri Krishan Gopal Lawania, proprietor of M/s Taj Products alongwith imposition of penalty of identical amount under Section 11AC of Central Excise Act, 1944. Further penalty of identical amount stands imposed upon the other applicant Shri Sunil Kumar Agarwal, who as the owner of the brand name 'Chandrakanta'. 2. As per facts on records, the premises of Shri Krishan Gopal Lawania at Village Rehan Kala, Etmadpur, Agra were visited by the Central Excise officers on 10/04/2011 and it was found that they were engaged in the manufacture of Pan Masala. Two packing machines were found ....
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....ses was also recorded wherein he, inter alia stated that he is the owner of the premises, which have been rented out to Shri Ajay Agarwal since last 3-4 months at the rent of Rs. 1,000/- (One thousand) per month. 5. In view of the above, officers seized the machine totally valued of Rs. 1.55 lakhs (One lakh fifty five thousands) approximately along with seizure of the Pan Masala found present in the said premises. Proceedings were recorded in the Panchnama on 10/04/2011. The seizure proceedings are not part of the present matter inasmuch as the same stand adjudicated separately by way of issuing separate show cause notice dated 15/09/2011. 6. It is seen that during the course of further investigations, Shri Krishan Gopal Lawania, Prop....
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.... brand name from the premises 15, Yamunotri Vihar, Kamla Nagar, Agra at a monthly payment of Rs. 25,000/- (Twenty five thousands) per month. Inasmuch as the said agreement was only for the premises shown in the agreement, and not for any other premises and came to know from the news about the illicit manufacture of Pan Masala from different premises in village Rehan Kala and he is not responsible for the same. 7. During the course of further investigations statement of various other persons were recorded. On the basis of the investigations, a show cause notice dated 03/04/2012 was issued to the appellant proposing confirmation of demand of duty as also for imposition of penalty. Notice also proposed imposition of penalty on Shri Sunil Ku....
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....e same would be required to be paid from 01/04/2010. The appellant's contention is that even in terms of Rule 17(2) of Pan Masala Packing Machines (Capacity of Determination and Collection of Duty) Rules, 2008 which provided for a deeming clause to the effect that if the unit is found to be manufactured and clearing Pan Masala without registration, then the duty liability was to be determined on the basis of number of packing machines found available in the premises of the unit and the retail sale price of the pouches manufactured with the aid of such packing machines and unless evidence to the contrary is provided to the satisfaction of the Central Excise officers, such machines shall be deemed to have been in operation since the First day....
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....shall be determined on the basis of number of packing machines found available in the premises of the unit and the retail sale price of the pouches manufactured with the aid of such packing machines and unless evidence to the contrary is provided to the satisfaction of the Central Excise Officers such machines shall be deemed to have been in operation since the first day of April of Financial Year in which the unit was found to be not registered. And shall be construed as operating packing machines for the purposes of Rule 7 and dealt with accordingly." 11. On going through the said rule, we note that the same is to the effect that if the manufacturer is found to be indulging in manufacturing activities without registration on the day of....
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....om 01/10/2010 and the present premises in which the machines were found to be installed were taken on rent by the appellant from January, 2011 as per the statement of the owner of premises. As such, it is clear that the appellant was manufacturing the said goods in rented premises with effect from January, 2011. 13. As such taking into consideration the entire evidence on record as also the provisions of Rule 17(2) of the Rules in question, we uphold that the duty liability is legally to be confirmed against the appellant from January, 2011. As regards penalty, we note that the appellant was admittedly indulging in clandestine activity for manufacture of Pan Masala and as such are liable to penalty of identical amount. In view of the ....