TaxTMI 
TaxTMI 
2022 (9) TMI 1338
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.... Fragrances and Rajeev Gupta supervisor of M/s. OM Fragrances containing the following allegations: "21. Whereas from the foregoing it appears that M/s. OM Fragrances, H.No. 786, opposite Kalandeshwar Shiv Temple, Village Burari, Delhi was responsible for contravening the provisions of Acts/Rules as discussed above in as much as that it was instrumental in planning, organizing, implementing and exercising the modus operandi of clandestine manufacture and clearance of excisable goods. Consequently M/s. OM Fragrances, H. No. 786, opposite Kalandeshwar Shiv Temple, Village Burari, Delhi rendered itself liable for penal action under Rule 25 of the Central Excise Rule, 2002 read with section 11AC of the Central Excise Act, 1944. 22. Whereas from the foregoing it appears that Sh. Sumit Agarwal, Partner and Sh. Rajeev Gupta, Supervisor of the Party were the persons responsible for contravening the various provisions of Acts/Rules as discussed above in as much as that they were instrumental in planning, organizing, implementing and exercising the entire modus operandi of clandestine manufacture and clearance of excisable goods. Consequently they both rendered themselves l....
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.... the matter afresh after providing an opportunity of hearing. 6. After remand, the adjudicating authority has passed the following order: Order "1. I confirm the Central Excise Duty at Rs. 26,29,439/- (Rs. Twenty Six lakhs Twenty Nine Thousands Four Hundred and Thirty Nine only) as determined in Para no. 55 under section 11A of the Central Excise Act, 1944 and order the recovery of the same; 2. I order for confiscation of seized finished goods valued at Rs. 3,85,000/- in terms of Rule 25 of the Central Excise Rules, 2002. However, I give an option to the party to redeem the goods on payment of Redemption Fine of Rs. 1,00,000/- (Rs. One Lac only) in terms of section 34 of the Central Excise Act, 1944; 3. I order to appropriate the due amount out of Rs. 75,00,000/- deposited by the party during investigation; 4. I impose a penalty of Rs. 26,29,439/- (Rupees Twenty Six lakhs Twenty Nine Thousands Four Hundred and Thirty Nine only) upon M/s. Om Fragrances under rule 25 of the Central Excise Rules, 2002 read with section 11AC of the Central Excise Act, 1944 read with Rule 17 of PMPMR; 5. I order for recovery of Interest in accordance wi....
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....nd Amendment Rules, 2008". The amended Rules came into force on 20.10.2008. Amongst others, rule 17(2) was also amended and the amended rule 17(2) is reproduced below: "17 (2). If it is found that goods have been manufactured in or cleared from a unit which is not registered with the jurisdictional Central Excise Office, then the duty liability of such unit 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 Officer, such machines shall be deemed to have been in operation since the 1st July, 2008 and shall be construed as operating packing machines for the purposes of rule 7 and dealt with accordingly." 13. The Principal Commissioner noted that since the search was conducted on 04.08.2008, the amended rule 17(2) which came into force from 20.08.2008 would not apply as it was not retrospective in nature. Thus, the duty could not have been demanded for the month of July and August 2008 at the rate of Rs. 12.50/- lakhs per machine per month....
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....m 01.07.2008 cannot be accepted The amended rule 17(2) would apply to any search conducted after 20.08.2008 and it would only be in such a situation that the consequence would flow from 01.07.2008. At the time when the search was conducted on 04.08.2008, rule 17(2) had not been amended and the amended rule 17(2) cannot impose duty at a higher rate with retrospective effect. 19. Learned authorised representative has placed reliance upon the decision of the Supreme Court in Government of India vs. Indian Tobacco Association [2018 ACR 440 Supreme Court of India ] as also the decision of the Karnataka High Court in Commr. of C.Ex. & S.T., Bangalore vs. Fosroc Chemicals (India) Pvt. Ltd. [2015 (318) E.L.T. 240 (Kar.)] and the decision of the Madras High Court in Mehler Engineered Products India Pvt. Ltd. vs. Union of India [2018 (364) E.L.T. 27 (Mad.)]. 20. The Supreme Court in Indian Tobacco Association held as follows: 15. The word "substitute" ordinarily would mean "to put (one) in place of another"; or "to replace". In Black's Law Dictionary, Fifth Edition, at page 1281, the word "substitute" has been defined to mean "To put in the place of another person ....