AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 770
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....i Vijay Kumar Ex-partner (Appellant No.2). Since both the appeals are arising out of a common impugned order, therefore, both the appeals are taken up together for discussion and decision. 2. Briefly stated facts of the present case are that the appellants were engaged in the manufacture of Menthol Flakes, Menthol Crystals, De-Mentholised Oil falling under Chapters 29 & 33 of Central Excise Tariff Act, 1985. The appellants started production from 20.08.2007 and were availing area based exemption under Notification No. 56/2002-CE dated 14.11.2002. The appellant M/s Om Sai Ram Industries was partnership firm with Shri Vinay Kumar. Shri Vikas and Shri Sunil Kumar as its partners. Shri Vinay Kumar and Shri Sunil Kumar remained partner of M/s Om Sai Ram Industries, Jammu upto 10.07.2008 and Shri Vikas retired from partnership on 30.09.2008. The appellant firm was transferred to M/s Emsons Organics Pvt Ltd, which later on remained the sole proprietor of the appellant firm since 30.09.2008. The main allegation of the department is based upon the investigation conducted by Commissioner of Central Excise, Meerut-II that the appellants were not procuring the raw material and were not manu....
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.... Central Excise Division, Jammu (for the month of May 2008) on the basis of the jurisdictional Range Officer report which inter alia reads as under: (i) ---- (ii) the party has infrastructure to carry out in manufacturing activity. (iii) ---- (iv) ---- (v) the manufacturing activity carried out by the party amounts to manufacture. (vi) the flow chart of manufacturing activity is enclosed. He also submits that there is no dispute about infrastructure and installed manufacturing set-up of the appellants and its working/production capabilities. He further submits that the goods contained in vehicles were verified at toll barrier and after due satisfaction, clearance was allowed from commercial taxes check post, Lakhanpur. 4.3 The learned Counsel also cites the letter/report dated 21.05.2010 of the jurisdictional Commissioner submitted to the Chief Commissioner, Central Excise, Chandigarh confirming that most of consignments of raw material were found entered at the toll barrier; the officers of District Industry Centre have fixed the capacity of manufacturing unit; have been regularly verifying their purchase consignments; th....
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....out establishing suppression, fraud etc on part of the appellant with intent to evade duty. He further submits that facts were in the knowledge of the department while issuing the show cause notice to M/s Swati Menthol & Allied Chemicals Ltd, Rampur for recovery of fraudulently availed cenvat credit and the appellant M/s Om Sai Ram Industries was one of the co-noticee in that case. He further submits that the extended period cannot be invoked when the department was aware of the facts as held by the Hon'ble Apex Court in the case of Collector of CE vs. Malleable Iron & Steel Casting Co Pvt Ltd [1998 (100) ELT 8 (SC)]. 4.7 As regards the imposition of penalties, the learned Counsel submits that the penalty under Section 11AC of the Act on Appellant No.1 is not imposable as there were neither any mens-rea nor any malafide brought on records on the part of appellant. He also submits that the penalty under 26(2) of the Central Excise Rules on Appellant No.2 is not imposable as the appellant firm lawfully manufactured and cleared the goods against statutory invoices and had infrastructure to manufacture impugned goods. 5. On the other hand, the learned Authorized Representative fo....
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....mands by considering all the evidences produced before them. We also find that in one of the cases, the department filed appeal before the Hon'ble Allahabad High Court and the same was dismissed as cited (supra). 9. Further, we also find that the department has not been able to produce even a single decision arising from the same investigation where the demand has been confirmed by any appellate authority. No evidence whatsoever has been produced by the department to show that even the electricity was disconnected even for hour during the relevant period. 10. Further, we find that the evidence produced by the appellant in the form of copies of toll posts at Lakhanpur have not been considered by the appellant. It appears that the show cause notice and the impugned order is solely issued on the basis of the presumption and assumption and no investigation whatsoever have been undertaken at the end of the appellant. 11. Further, we find that no statements of the transporters have been recorded. It is pertinent to note that the refunds have been sanctioned by the adjudicating authority but the department has not challenged the same till date and as per the dec....
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....e consignments of raw material were found entered at the Toll barrier. (ii) The Officers of District Industry Centre, who have assessed and fixed the capacity of manufacturing units, have been regularly verifying their purchase consignments. (iii) The Range staff had also been visiting these units for PBC Checks/verification of plant/machineries and reported nothing adverse against these units. 6. Therefore, it may not be strongly alleged with certainty that during the period 20052006 to 2008- 2009, these 27 units have not purchased crude Mentha oil and therefore have not manufactured any Menthol products in their units at all. There is hardly any time left for further investigation to strengthen the case as process is very time consuming and most of these of units have closed their factories due to withdrawal of Central Excise Duty on all Mentha products w.e.f 27.02.2010. Thus, the investigation may not be in tune with the investigations conducted by the Central Excise Commissionerate Meerut-II." 11. We further take of the fact that the similar issue on identical facts came up before this Tribunal in the case of Nanda Mint and Pine Chemicals Ltd....
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....ents were declared non-existent etc. however, on close scrutiny of the records, the following facts emerges: (i) Most of the consignments of raw material were found entered at the Toll barrier. (ii) The Officers of District Industry Centre, who have assessed and fixed the capacity of manufacturing units, have been regularly verifying their purchase consignments. (iii) The Range staff had also been visiting these units for PBC Checks/verification of plant/machineries and reported nothing adverse against these units. 6. Therefore, it may not be strongly alleged with certainty that during the period 20052006 to 2008-2009, these 27 units have not purchased crude Mentha oil and therefore have not manufactured any Menthol products in their units at all. There is hardly any time left for further investigation to strengthen the case as process is very time consuming and most of these of units have closed their factories due to withdrawal of Central Excise Duty on all Mentha products w.e.f 27.02.2010. Thus, the investigation may not be in tune with the investigations conducted by the Central Excise Commissionerate Merrut-II." 9. The said report a....
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....tured to witness the process of manufacture. The adjudication is to be done on the basis of evidence produced before the Adjudicating Authority. As per Evidence Act evidence in totality is to be taken into consideration and therefore, finding recorded in the impugned Order by the Original Authority who passed the said Order dated 29/01/2010 is bad in law. The Original Authority did not understand the process either of assessments or of adjudication. Further the investigations were not undertaken to find out wherefrom the inputs were received by the appellant for the goods they manufactured and on which they paid duty and which were exported, if they had been received the inputs from M/s Ruchi Infotech System, Jammu or the other suppliers of inputs. Further, the additional evidence submitted by the appellant indicated that in respect of units in Jammu, Central Excise Officers visited the factory premises and seen that the manufacturing process going on was evidence by them and such evidences being on record and submitted by the appellant it was the duty of the Original Authority to accept them and not to discard by saying that the Officers have not seen the goods being manufactured ....
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....t the evidences are not enough to sustain the demands. When the allegation of bogus procurement of raw material, manufacture and clearance by the Jammu based units cannot be established, allegation of bogus procurement from these units by Meerut based manufacturers cannot be sustained. We find that Tribunal in the case of Arora Aromatics (supra) held as follows: Further, the additional evidence submitted by the appellant indicated that in respect of units in Jammu, Central Excise Officers visited the factory premises and seen that the manufacturing process going on was evidence by them and such evidences being on record and submitted by the appellant it was the duty of the Original Authority to accept them and not to discard by saying that the Officers have not seen the goods being manufactured by their own eyes. Further, the receipt of inputs was verified by the Officers of Central Excise Department and sample of the same were also drawn and forwarded for Chemical Examination. Such evidence was also not accepted by the Original Authority; Therefore, it appears that the Original Authority was predetermined to adjudicate the matter in the manner in which he has decided the ....