TaxTMI 
TaxTMI 
2018 (7) TMI 1360
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.... The brief facts are that K.K. Tobacco Company situated at SA-2/415A-6, Premchand Colony, Varanasi was a registered manufacturer engaged in manufacture of the Deshi Pan Samigri falling under CSH 24039920 of the First schedule to CETA. The proprietor, Shri Krishna Kant Pandey s/o Shri Surya Nath Pandey looked after the management and day to day working of the unit. Shri Shashi Kant Pandey s/o Shri Surya Nath Pandey is proprietor of M/s Surya Traders, situated at SA-2/415 A-9, Premchand Colony, Varanasi and is involved in trading activities and manufacturing of sweet Supari. Shri Laxmi Kant Pandey also s/o Shri Surya Kant Pandey is the brother of the other two appellants. 3. The officers of the Central Excise visited the premises of the appellants K.K. Tobacco Company on 6 Fabruary, 2011 and found 34,200 pouches to the Deshi Pan Samigri in excess over and above the recorded stock of 39,240 pouches. Another search took place at the premises of M/s Surya Traders on the same day proprietor- Shashi Kant Pandey. During search of the said premises, the officers found 03 pouch packing machines, 01 mixing machine, 02 Supari cutting machines, 02 sealing machines and 01 weighing machine. Th....
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.... of each pouch packing machine was 160 pouches per minute. Shri Krishna Kant Pandey accepted that in the residential premises the activity of manufacturing Banarsi Ashiq brand Deshi Pan Samigri and Uncle brand Sweet Supari was going on without there being any Central Excise Registration for the said premises. Further he was using same packing material used in the packing of BanarsiAshiq brand Deshi Pan Samigri by the registered unit - K.K. Tobacco Company belonging to him. Further, he stated that the work of manufacturing of these goods were going on at his residential premises for the last 10 months and no Central Excise Duty was paid and he had no account of goods manufactured and sold. During follow up investigation, that two packing machines were found to have been purchased on 04 January, 2011 and one pouch packing machine on 22 April, 2008 in the name of Surya Traders. 6. Shri Shashi Kant Pandey in his statement stated that the packing machines used to run approximately 8 hours per day. The Revenue taking into account the packing capacity of each pouch packing machines, working hours, the day on which machine were purchased and total number of pouch packing machines used f....
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....e provisions of the Central Excise Act, the excise duty can be demanded on the basis of packing/ production capacity of machines if goods fall under the notification in terms of Section 3A of the Act, popularly known as compounded levy scheme. As the goods manufactured by the appellant - Deshi Pan Samigri (CTH 24039920) is not a notified goods as per Section 3A of the Act, therefore, the compounded levy scheme is not applicable on the facts of the present case. Thus, the learned Commissioner erred in confirming the duty under the compounded levy scheme in terms of Section 3A, the same is ab initio void, not permissible and as such the impugned order is fit to be set aside. On the very fact that the manufactured goods does not fall in the Notification under Section 3A for being charged on the basis of production capacity of the packing machines, thus, the duty so demanded on the basis of production capacity is not sustainable and fit to be set aside. 10. It is further urged that on the date of search the Department found 110160 pouches of Deshi Pan Samigri, for which separate SCN dated 20 July, 2011, was issued proposing seizure of the said goods which have been adjudicated by th....
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....these raw materials were to be used for manufacture of Deshi Pan Samigri, and, thus, the same cannot be confiscated. Further the said goods which were seized vide Panchnama have been released for want of evidence of clandestine manufacture of Banarsi Ashiq brand Deshi Pan Samigri. It was also found that the seven roles of packing material seized were for Uncle brand Sweet Supari. It is well settled law that suspicion however strong or grave is not the substitute of proof. Further, there is no evidence regarding purchase of raw materials, no evidence regarding sale of alleged excisable goods, no evidence regarding transporting of raw metals or finished goods, no evidence of identification of buyers and no evidence regarding the receipt of huge alleged sale proceeds, the entire produce nothing more than based on wild guess work on assumptions and presumptions beyond the scheme of the act and the rules. Thus the impugned order is liable to be set aside. 13. It is further submitted that the impugned demand and worked out on arithmetical calculation is based on arbitrary and baseless of assumptions namely (i) production commenced on each of the packing machines immediately after the ....
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....resides in the north portion of House No. SA-2/415 A-9, Premchand Colony Pandeypur, Varanasi (hereinafter referred to as 'premises in question), which is owned by his mother Smt. Ratna Pandey. The aforesaid north portion of the premises in question is also owned by Smt. Ratna Pandey, and registered premises of M/s Surya Traders is situated. The said firm is an entirely separate entity engaged in trading of loose sweet supari, loose desi pan samagri. The said firm is registered with the trade tax department. Therefore, it cannot be said the appellant had manufactured goods for the disputed period or any time. 13. It is submitted that merely on the basis of statement, such a huge demand cannot be confirmed upon the appellant. Reliance is placed on the decision of Vikram Cement (P) Ltd. Vs. CCE, Kanpur, 2012 (286) ELT 615 (Tri.- Del.) which is affirmed by Hon'ble Allahabad High Court in the case of Commissioner Vs. Vikram Cement (P) Ltd., 2014 (303) ELT A82 (All.) and CIT Vs. Dhingra Metal Works, 2010-TIOL-693-HC-DEL-1T. 14 It is, therefore, submitted that the impugned demand along with various penalties imposed on appellants are not sustainable in the eyes of law and li....