TaxTMI 
TaxTMI 
2026 (3) TMI 738
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....ugned order dated 26.11.2012, Central Excise duty demand of Rs. 8,75,00,000/- was confirmed under Section 11A(2) of the Central Excise Act, 1944 (for short, 'the Act of 1944) read with Rules 7, 17(2) and 18 of the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 (for short, 'the Rules of 2008'), along with interest under Section 11AB/11AA of the Act of 1994, read with second proviso to Rule 9 of the Rules of 2008, on the appellant Shri Rajendra Babulal Malu, Managing Director of M/s Shree Venkateshwara Pan Masala Industries Pvt. Ltd. (SVPMIPL). Besides, an equal amount of penalty was also imposed on him under Rule 25(1) of the Central Excise Rules, 2002 (for short, 'the Rules of 2002') read with Rule 18 of the Rules of 2008. The connected appeals were filed by the other appellants viz., M/s SVPMIPL, M/s Maruti Tobacco Products Pvt. Ltd., M/s E.C. Packaging, M/s S.K. Star Forwarding Agency, M/s Lalji Mulji Transport Company, M/s Zemini Marketing Company, Shri Parvin Shrinivas Bhattad and Shri Sunil Shrinivas Bhattad, against whom the impugned order has imposed penalties under Rule 26 of the Rules of 2002. 2. Brief facts of the case, lead....
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....ture Gutka. He further stated that M/s SVPMIPL is engaged in manufacture of both exempted and dutiable goods; since Gutka is liable for central excise duty, and as he wanted to keep dutiable and exempted goods separately, the machines meant for manufacture of gutka were brought at the farmhouse. The five pouch packing machines were purchased from Kanpur in the name of M/s SVPMIPL and were put to use on trial basis and to substantiate such fact, he had produced the purchase bill No. 26 dated 11.05.2011 issued by M/s E. C. Packaging, Kanpur, lorry receipt No. 2418 dated 11.05.2011 of M/s S.K. Star Forwarding Agency, issued for transport of machines and related documents; that pre-mix of gutka and laminated rolls were procured from M/s MTPPL for trial run; the finished gutka found from farm house is manufactured in farm house by using said five machines during the course of trial run of machines; that the central excise registration was not obtained as he was not sure of getting Gutka manufacturing license from FDA department of Govt. of Maharashtra. In his statement dated 27.05.2011, he had stated that Zee brand Gutka seized from factory premises of M/s SVPMIPL was purchased from M/s....
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.... to customers and they had sold one consignment of Zee brand Gutka and Pan Masala to M/s SVPMIPL through invoice no. 80 dated 14.05.2011, which was transported through M/s Lalji Mulji Transport Co., Vadodara under L.R. No. 27366079 dated 14.05.2011. Shri Rajendra Babulal Malu had placed order in the name of M/s SVPMIPL for 20 cartons of Zee brand Gutka and 30 cartons of Pan Masala, which were supplied by them and bills were raised in the name of M/s SVPMIPL. After 01.03.2011, as a consequence of the decision of the Hon'ble Supreme Court, the nature of packing of Gutka had been changed from gunny bags to cartons; the authenticated check post copy of Form No. 402 under Gujarat VAT might be available with the transporter or Consignee; in which the details of their name, registration number and address are available and that after downloading the said form, the details of consignee, nature of transaction, value of consignment etc., are written by them. They have received the payment in respect of goods sold by them from M/s SVPMIPL and he produced the ledger copy for the same. Statement of Shri Bipinkumar Rameschandra Bhat, authorized signatory and accountant of M/s Maruti Tobacco Prod....
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....ujarat factory, which were used in his farm for packing of gutka manufactured at farm house, but it has been observed that some of the seized gutka manufactured at his farm house does not have date of manufacture and lot no. on it. Thus, his contention that he had received the pre-printed packing material is false. As per statement of Shri Bhatt, they have manufactured only one consignment of Speed Gutka which was exported; which shows that the Speed brand gutka found and seized from the premises of M/s SVPMIPL and shop and residence of Bhattad brothers was manufactured by Shri Rajendra Malu. The Zee brand Gutka seized from the farmhouse of Shri Malu bear Lot number as S2. Similarly, finished Speed brand Gutka seized from the premises of both the Bhattad brothers bear Lot No. S2. M/s MTPPL has never manufactured either 'Zee' brand Gutka bearing Lot No. Z2 or 'Speed' brand Gutka with Lot No. S2. Therefore, the question of procuring empty packets with the above Lot number on it by Shri Rajendra Malu does not arise. This shows that the documents provided by Shri Rajendra Malu in connection with purchase and procurement of five machines, pre-mix of Gutka, printed laminated rolls and fi....
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.... Road, Dharangutti416103, Tal-Shirol, District-Kolhapur. Shri Rajendra Babulal Malu was Managing Director of SVPMIPL. The demand from appellant Rajendra Babulal Malu is untenable in law, since it is apparent from the evidences on record that the premises were taken on lease by appellant-SVPMIPL and machines were purchased and installed by them; that merely because the appellant Rajendra Babulal Malu is the Director of SVPMIL, he does not become the manufacturer since the company SVPMIL is a separate legal entity, which is distinct and different from its Director. Hence no duty can be demanded from Shri Rajendra Malu and no penalty can be imposed upon him and M/s SVPMIPL. 5.2 That the adjudicating authority has not discussed even a single evidence on record and has not negated the fact that the five Pouch Making Machines were purchased and installed by the appellant M/s SVPMIPL on 16.05.2011 and operated on trial basis only for three days i.e. 16.05.2011 to 18.05.2011. The statement dated 07.06.2011 of Shri Mahadeo Bapuso Lokare, Electrician, who had carried out the work of wiring, fixing Boards and providing the electric points of single-phase connection in the premises in quest....
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....chines was made by M/s SVPMIPL to E.C. Packaging by Cheque. (iii) The above statement of Shri Rajendra Babulal Malu is also corroborated by statement dated 04.07.2011 of Shri Mahendra, authorized signatory of the transporter, M/s New S. K. Star Forwarding Agency, Kanpur and Statement dated 06.08.2011 of Driver, Shivabalak Rajendra Kumar employed by the said Transporter, in which they have stated that the correct number of the Truck by which the said five machines were transported is UP 78 AN 6797 and that the five machines had been transported under Lorry Receipt (Bilty) dated 11.05.2011 from Kanpur to Nandani, Kolhapur. Further, the said Driver also submitted to the Central Excise department, his affidavit dated 18.08.2011 affirming that he had transported the said five machines from Kanpur to Kolhapur. (iv) Further the said vehicle transporting pouch packing machine transited through Sangli on 15.05.2011 before reaching Kolhapur, as is evident from the Transit Receipt issued by Sangli Miraj and Kupwad City Municipal Corporation for immediate export out of Sangli. 5.3 That from above evidences, it is established that the five Machines were purchased only on 11....
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.... cross-examine them, though specifically requested by the appellant by letter dated 06.11.2012. Learned Advocate had relied upon the following judgments to submit that no reliance can be placed on the statements, where requirements of Section 9D ibid have not been complied with: (i) Junaid Kudia Vs. CC - (2024) 16 Centax 503 (Tri.-Bom.), upheld by Hon'ble Supreme Court - 2024 (388) ELT 529 (SC) (ii) Additional Director General (Adjudication) Vs. Its My name P. Ltd - 2021(375) ELT 545 (Del) (iii) Surya Wires P. Ltd Vs. Principal Commissioner-2025 (4) TMI 441CESTAT-NEW DELHI (iv) CCE Vs. Paradise Steels - 2025 (6) TMI 1961-CESTAT-NEW DELHI (v) Ashfaq Baig Vs. CC - 2025 (6) TMI 692-CESTAT- NEW DELHI. The refusal of the Learned adjudicating authority to grant opportunity to the appellant to cross-examine the said Pravin and Sunil, on whose statements, reliance has been placed, is plainly contrary to the provisions of Section 9D ibid as held by the judicial forums as referred above. Learned Advocate submitted that in any event, the said Pravin and Sunil have merely stated having purchased Gutkha from the appellant in March and February 201....
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....scarded for consideration. 5.7 He has relied upon the statement of the appellant-Rajendra Babulal Malu to state that machines were used only for Trial run and Central Excise Registration was not obtained, since FDA license from State Government had yet to be obtained and the premix and Printed Rolls which were found by the Central Excise Officers in the said premises had been purchased on trial basis from Maruti Tobacco Products P. Ltd, Vasana, Gujarat and received under their Delivery Challan. That further, as stated by him, the ZEE Gutkha found in the premises had been purchased from Zemini Marketing Co., Vadodara under their Bill No.80 dated 14-5-2011 and transported by Lalji Muli Co., under their LR dated 14-5-2011. The aforesaid version of the appellant-Rajendra Babulal Malu has been corroborated by statement dated 5.07.2011 of Bipinkumar Rameshchandra Bhatt, Accountant and Authorized signatory of Maruti Tobacco Products Ltd., in which, he had confirmed the facts of supplying one consignment of Pre-mix of Gutkha and laminates to SVPMIPL under their Delivery Challan, through transporter Lalji Mulji Transport Co., Vadodara and by statement dated 8-6-2011 of Amarsingh Mohabats....
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....e further submitted that in case of Zemini Marketing, Zee Gutka and Zee Pan Masala were supplied against invoice no. 80 dated 14.05.0211 through Lalji Mulji Transport. That the adjudicating authority has imposed penalty merely on ground that the documents are fabricated as no authenticated Form No. 402 by the check-post authorities were produced. No evidence has been provided as to how the invoice issued by them, the transport documents and the statements affirming sale, transport and delivery of goods by them to M/s SVPMIPL are not genuine. That no investigation was made at check post. That similarly in case of M/s E. C. Packaging, Kanpur, which supplied five numbers of pouch packing machines to M/s SVPMIPL at Jaysingpur, the goods were supplied through M/s S.K. Star Forwarding Agency through vehicle No. UP78 AN6797, but inadvertently the number was mentioned as UP78 AM 6797 and to such effect, the transit receipt of Sangli Miraj and Kupwad City Municipal Corporation were issued. The payment towards supply was also made. The statement dated 08.06.2011 of Shri Ajaykumar Mishra, Supervisor and statement dated 10.06.2011 of Shri Narendra Shrivastav, Authorised signatory are available....
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....he adjudicating authority has termed the records as fake, whereas no evidence to support such stand has been placed on record. The only allegation is that Form No. 402 was not filled properly or not authenticated, which cannot be considered as the proper evidence against the appellant. No evidence has been provided that the documents showing delivery and transport documents and statements are wrong. No statement of check post officer or driver was recorded. He submitted that in case of M/s Lalji Mulji Transport, the said transport company has transported goods from M/s MTPPL to M/s SVPMIPL and copy of LR was also submitted. That no evidence contrary to such LR is one record. That only for the reason that copy of Form 402 was not fully filled up or was not authenticated by check post office, cannot be a ground to impose penalty. No investigation was made at check post nor statement of any checkpost officer or driver was recorded. Therefore, the penalties imposed against the appellants cannot be sustained. 7. On the other hand, Shri Shamboo Nath, Special Counsel appearing for the Revenue has reiterated the findings recorded in the impugned order and supported the case of Revenue b....
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....who had stated that on 13.05.2011 and 14.05.2011, he had carried out the work of fixing five electric points, which were got completed on 14.05.2011 and that no machines were installed or available in the said room, prior to fixing of said five electrical points; and that the machines were connected on 16.05.2011. The officers also recorded statement of Shri Narendra Singh Shrivastav, authorized signatory of E.C. Packaging on 10.06.2011, wherein he had stated that the Packaging machines were cleared on 11.05.2011 to M/s SVPMIPL; statement dated 10.06.2011 of Shri Mahendrakumar of M/s New S.K. Star Forwarding Agency, Kanpur was also recorded, wherein he had stated that five numbers of packing machines were transported by them on 11.05.2011 from M/s E.C Packaging to Kolhapur through Bilty No. 2418; that in the statement dated 06.08.2011 of Driver Shri Shivbalak Rajendrakumar, it had been deposed that he had transported machines from Kanpur to Jaysinghpur on 11.05.2011 and the same reached the premises of M/s SVPMIPL, Jaysinghpur on 15.05.2011 and the machines were unloaded on 16.05.2011. In addition, the Driver Shri Shivbalak also submitted affidavit dated 18.08.2011, affirming that ....
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....rvising the construction activities. Thus, from the said deposition of Shri Chavan, whose testimony about the commencement of the manufacturing activity of pan-masala/gutka is the vital focal point of investigation, has admittedly nowhere been specified for coming to the conclusion that the machines were installed on a specific date prior to 16.05.2011, as claimed by the appellants regarding actual commencement of the manufacturing activities of pan-masala/gutka. In other words, the said supervisor being the custodian of the rooms at the material time, was supposed to know the actual installation of the machines therein and that since he has not specifically commented about the date of installation, in our considered opinion, it is erroneous on the part of the department to merely assume that the manufacturing activity commenced on a date, prior to 16.05.2011, as claimed by the appellants. 11. Further, it is also observed from the case file that no statement of any other person viz., labour or watchman etc., had been relied upon in the SCN to prove that the pan-masala/gutka manufacturing activity was taking place at the farm house beforehand. On the contrary, when the officers v....
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....the said vehicle UP - 78 AN 6797 in toll records from 11.05.2011 to 15.05.2011, we find that as per the driver's statement and the transit receipt of Sangli Miraj and Kupwad City Municipal corporation, the vehicle had reached from Kanpur to Jaysinghpur through other route and no enquiry was made in spite of bringing this fact to the knowledge of the investigating officers. Further, the statement of the driver was also not negated in the enquiry proceedings. In such case, the allegation that toll plaza in-charge of other route i.e., Khed Shivpur and Anewadi toll at National Highway No.4 connecting the places between Kolhapur and Pune, has denied passing of vehicle, alone cannot be considered as a vital piece of evidence, especially in view of the fact that the movement of the goods as stated by the driver has been supported with issuance of transit receipt by the Municipal Corporation has not been countered. 14. On the basis of the statement furnished by authorized person Shri Narendrakumar Shrivastav, the learned Adjudicating Authority has concluded that since M/s E.C. Packaging were not engaged in supply of new machine, but were engaged in supply of old/ repaired machines only,....
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....ant their cross examination for a proper fact finding with regard to the issue dealt with in the impugned order inasmuch as right to check and verify the authenticity of such statements through cross examination is the basic fundamental of the principles, in appreciation of the evidence. It was more so in the situation, especially where those statements were said to be incriminatory. In such case, no reliance can be placed on those types of statements, when Section 9D of the Act of 1944 was not complied with. Our said views are supported by the Order passed by this Bench of the Tribunal, in the case of Junaid Kudia Vs. Commissioner of Customs, Mumbai Import-II - (2024) 16 Centax 503 (Tri.- Bom.), which was also upheld by the Hon'ble Supreme Court, reported in 2024 (388) ELT 529 (SC). The Hon'ble Delhi High Court in the case of Additional Director General (Adjudication) Vs. Its My Name Pvt. Ltd. - 2021(375) ELT 545 (Del.) has also endorsed the said views expressed by the judicial forums, with regard to affording of cross examination for appreciation of evidence. The Co-ordinate Benches of the Tribunal, in the case of M/s Surya Wires Pvt. Ltd. & Ors. Vs. Principal Commissioner, CGST,....
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....uced by Shri Rajendra Malu. Furthermore, it is also a fact, which cannot be ignored that the appellants were well aware that Gutka cannot be sold in market in Plastic pouches and hence, there was no necessity for them to order and procure printed laminated plastic sheets, in view of the fact that gutka packed in such plastic pouches was not saleable in the market after 01.03.2011. We find that though the department had proceeded against the appellants, mainly based on the statements and documents produced by the appellants, but it had not brought any evidence by way of independent investigation to prove the charges levelled against appellants. When the SCN had chosen not to rely upon the statements of supplier and recipient, regarding procurement of pre-mix of gutka and laminated rolls, in that case they should have mentioned the other source and mode of procurement, as well as evidence of such procurement. The onus of producing evidence to the contrary to the statements and documents on record, which are part of RUDs to SCN lies heavily upon the revenue, which in the present case has not at all been substantiated. We also find that during seizure, no printing machine or any means ....
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.... merely on the basis of statements of Shri Pravin and Shrinivas Bhattad or Shri Bipin Rameshchandra Bhatt, accountant of M/s MTPPL that the gutka stock seized from Bhattad brothers was manufactured by Shri Rajendra Malu. Further, no records related to production and clearance of gutka from M/s MTPPL has been brought on record, which leads to inference that the allegation is based merely upon statement without any corroborative evidence. Pertinently Bhattad brothers in their statements had nowhere stated that such gutka was manufactured by Shri Rajendra Malu or that the same was received from farmhouse at Jaysinghpur. We also find that though the appellants had sought for samples of gutka pouches, in order to get it tested, for ascertaining the difference in the quality of gutka pouches found in the farm house vis-àvis those found at the premises of Bhattad brothers, but such request of the appellants was not acceded to by the adjudicating authority. Most importantly the appellant had sought to cross examine the panch witness due to discrepancy in panchnama. The Panchnama drawn at the Shop of Sunil Bhattad, shows that during such proceedings, Shri Pravin Bhattad came to the S....
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....19 (7) TMI 5 - CESTAT-Ahmedabad, wherein it has been held that mere absence of check-post stamps on the documents, it cannot be said that the goods were not transported. 20. We find that statement dated 07.06.2011 of the electrician Shri Mahadeo Bapuso Lokare, mentioning about fixing of electric connections and panels in the farm house belonging to Shri Rajendra Malu has not been contradicted by the department. Thus, it is proved that the five numbers of pouch packing machines were installed only on 16.05.2011; and hence no manufacturing activity could have taken place earlier to such date. Similarly, statements of Shri Rajendra Malu which are exculpatory, statement dated 10.06.2011 of Shri Narendra Shrivatstav, authorized signatory of M/s E.C. Packaging, Kanpur who supplied pouch packing machines, statement dated 06.08.2011 of Shri Shivbalak Rajendra Kumar driver who transported machines and his affidavit dated 18.08.2011, statement dated 04.07.2011 of Shri Mahendra Kumar of M/s S.K. Star Forwarding agency and documents discussed in preceding paragraphs, which are part of the RUDs to SCN, have remained uncontroverted and unequivocally, prove the fact that the pouch packing mach....
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.... registration, then it has to be deemed that the manufacturing activity was taking place therein from the First day of April of the financial year, in which the unit was not found to be registered. However, if the manufacturer is in a position to demonstrate the actual date of commencement of production or clearance of goods, then the deeming provision under the said sub-rule would not apply. In the present case, the evidences available on record clearly show that the machines in fact were installed on 16.05.2011; and trial production was commenced by Shri Rajendra Malu w.e.f. 16.05.2011. Therefore, demand of duty would only be confined for the period from 16.05.2011 till 18.05.2011. Our such views are based upon the orders passed by the Co-ordinate Benches of the Tribunal in the cases of Krishan Gopal Lawania Vs. CCE, Kanpur in Final Order No. 71536-71537/2018 dated 17.07.2018 in appeal No. E/55963553964/2013 - EX (DB) and Trimurti Fragrances Pvt. Ltd. Vs. CCE, Delhi-III - 2015 (329) ELT 175 (Tri. - Del.). As such, taking into record the evidences available in the case file, sub-rule (2) of Rule 17 of the Rules of 2008 read with the said Orders of the Tribunal (supra), we hold tha....