AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (7) TMI 904
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.... SMFPPL had filed declaration on 01.04.2011 in terms of Rule 6 of PMPM Rules wherein they declared the details of packing machines to be used for packing of Gutkha along with specific MRP of the pouches. The said declaration was as under: TABLE-'A' Sl. No. Floor Description of machines 1 Ground Floor 3 PMPM manufacturing Gutkha pouches having MRP of Rs. 3/-. 17 PMPM manufacturing Gutkha pouches having MRP of Rs. 1.5/-. 2 First Floor 3 PMPM manufacturing Gutkha pouches having MRP of Rs. 1/- each. 3 Second Floor 5 PMPM manufacturing Gutkha pouches having MRP of Rs. 2.5/-. 19 PMPM manufacturing Gutkha pouches having MRP of Rs. 1/-. TOTAL MACHINES OF VARIOUS MRPs 37 Pan Masala Packing Machines of MRP of Re. 1/- 17 Pan Masala Packing Machines of MRP of Re. 1.5/- 5 Pan Masala Packing Machines of MRP of Re. 2.5/- 3 Pan Masala Packing Machines of MRP of Re. 3/- TOTAL MACHINES IN THE FACTORY 62 Pan Masala Packing Machines However during surprise check it was found that in case of machines installed on ground floor the machines were manufacturing pouches as under: TABLE-'B' Machine Sr.No. As per declaration filed under Rule-6 of PMPM Rules, 2008....
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....e.1/- sealed pack roll - 20 Re.1/- Re.1/- - 21 Re.1/- Re.1/(Branch GOA 1000) - 22 Re.1/- Re.1/-sealed pack roll - 23 Re.1/- Re.1/- sealed pack roll - 24 Re.1/- Re.1/-No roll - 25 Re.1/- Re.1/-(Branch GOA 1000) - 26 Re.1/- Re.1/- - 27 Re.1/- Re.1/- - 28 Re.1/- Re.1/- - 29 Re.1/- Re.1/- - 30 Re.1/- Re.1/- - 31 Re.1/- Re.1/-(Branch GOA 1000) - 32 Re.1/- Re.1/-(Branch GOA 1000) - 33 Re.1/- Re.1/- - 34 Re.1/- Re.1/-(Branch GOA 1000) - 35 Re.1/- Re.1/- Gutkha pouches having MRP of Rs. 1.5/- lying in front of the machine 36 Re.1/- Rs. 1.5/- (Brand GOA 1000) - 37 Re.1/- No packing roll - 38 Re.2.5/- Re.2.5/- - 39 Re.2.5/- Re.2.5/- - 40 Re.2.5/- Re.2.5/- - 41 Re.2.5/- Re.2.5/- - 42 Re.2.5/- Re.2.5/- - 2. It was alleged that in respect of machines installed at first floor, though M/s SMFPPL have declared that pouches of Re. 1/- MRP would be produced but actually they were packing pouches of Rs. 1.5/-. Also that in respect of packing machines installed at second floor, they had declared the pouches to be pac....
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....nder Rule 6 of PMPM Rules, 2008 and has evaded the Central Excise duty. The show cause notice alleged that the Appellant unit has contravened the provisions of Rule 6 (6), 7 and 9 of the PMPM Rules, 2008 and that as the Appellant has manufactured the notified goods in contravention of their declaration, therefore as per the provisions of Rule 9 of the PMPM Rules, 2008 the rate of duty applicable to goods of Highest Retail sale i.e. Retail sale price of Rs. 3 shall be applicable in respect of all packing machines operated by the Appellant and a central excise duty of Rs. 22,32,00,000/- is payable by the Appellant unit. That the above acts of omission and commission on the part of Appellant unit has been committed wilfully with intention to evade duty and the extended period as provided under Section 11 A (4) of the Central Excise Act is applicable. It was therefore proposed to demand duty of Rs. 22,32,00,000/- along with interest from the Appellant Unit and the amount of duty of Rs. 10,73,50,000/- already paid in respect of declared capacity be adjusted against the same. Penalty under Rule 17 of the PMPM Rules along with Section 11AC was also proposed. Personal penalty was also prop....
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....the Companies Act stipulates that provisions of Section 266 do not apply to a private company. Even otherwise, section 266 is wholly irrelevant, as the same is applicable to a company which is to be incorporated and not to an existing company. The ld. Commissioner has referred to Section 270 of the Companies Act to hold that the Directors existing in April 2011 were disqualified however he has ignored Section 273 of the Companies Act which categorically states that Section 270 will not apply to a private company. He also draws attention to clause 27 of Articles of Association of SMFPPL, which states that it shall not be necessary for a director to hold any share in the company. He submits that it is on record that Mr J.M. Joshi was not a director of SMFPPL since year 2000 and had also sold all his shares prior to initiation of investigation of the instant case. Therefore the Appellants had no control whatsoever on the operations of SMFPPL. Further, Mr Sachin Joshi was neither a shareholder nor a director nor an employee of SMFPPL and therefore he cannot have any control on the operations of SMFPPL. 5. He submits that the adjudicating authority has relied upon the statements of th....
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....e 26 cannot be imposed. 6. Shri A. Mishra Ld. AR appearing for the revenue supports the findings of the impugned order. He submits that since the goods other than of declared RSP has been found to be manufactured by the Appellant Unit, therefore the duty is liable to be paid as per highest RSP goods. He also supports the findings for imposition of penalty upon co-appellants. 7. Heard both the sides and perused the records. We find that the Unit had filed declaration on 01.04.2011 in terms of Rule 6 of PMPM Rules wherein they declared the details of packing machines to be used for packing of Gutkha along with specific MRP of the pouches. However the unit was found to be engaged in packing pouches of higher MRP in contravention of declaration filed by them under Rule 6 of PMPM Rules, 2008. Clearly the Appellant unit contravened the provisions of Rule 6 (6), 7 and 9 of the PMPM Rules, 2008 and since the notified goods were manufactured in contravention of their declaration, therefore as per the provisions of Rule 9 of the PMPM Rules, 2008 the rate of duty applicable to goods of Highest RSP, Rs. 3 in this case will be applicable in respect of all packing machines operated by the Ap....
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....ind that no involvement of above persons is on record. We do not find any act committed by both Appellants to evade payment of duty or to violate the Pan masala packaging Rules. Shri Dilipkumar Amrutlal Jani has not named any of these persons to be involved in any act of violation of law nor any of the persons whose statements has been relied upon i.e. production Manager or Supervisors has named the Appellants to be involved in any act of violation. The show cause notice has relied upon the statements of employees Shri Maurya, Shri Manoj Kumar, Shri Sawant, Shri Gehlot, Shri Gautam recorded in relation to some other case booked by the DGCEI against the Appellant Unit to hold both the Appellant‟s responsible for alleged violation in present case. However we find that in the present case no involvement of these Appellants is on record. The Appellant had sought cross examination of the aforesaid persons which has been denied by the adjudicating authority. In such case when the statements were not recorded in investigation of present case, the same cannot be relied upon. Even also in absence of cross examination in terms of Section 9D of the Central Excise Act, 1944, these statem....