Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise vs M/S. Ramani Ice Cream Co.P Ltd on 14 March, 2014
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. III
Excise Appeal No. 2905 of 2007- Ex[SM]
[Arising out of Order-In-Appeal No. 7/2007 dated 15.10.2007 passed by Committee of Chief Commissioner, Bhopal]
For approval and signature:
Honble Ms. Archana Wadhwa, Member (Judicial)
1
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No
3
Whether Their Lordships wish to see the fair copy of the Order?
Seen
4
Whether Order is to be circulated to the Departmental authorities?
Yes
Commissioner of Central Excise Appellants
Bhopal
Vs.
M/s. Ramani Ice Cream Co.P Ltd. Respondent,
Appearance:
Shri R K Mishra , DR for the Appellants None for the Respondent Date of Hearing: 10.02.2014 Date of decision: 14.3 .2014 ORDER NO. FO/ A 51081 /2014-ST(SM) Per Archana Wadhwa:
Being aggrieved with the order passed by Commissioner in denovo proceedings, Revenue has filed the present appeal. I have heard Shri RK Mishra, learned DR appearing for the Revenue. Nobody appeared for the respondents.
2. As per facts on record, the respondents are engaged in the manufacture of ice cream and other products. Their factory was visited by the Central Excise officers, who conducted various investigations and recorded the statement of various persons. Based upon the said evidence and the consumption of sugar, as reflected in their records, proceedings were initiated for recovery of duty in respect of allegedly clandestinely removed ice cream. The said proceedings resulted in confirmation of demand of Rs.28,12,308/- as also imposition of penalties.
3. On appeal against the said order, Tribunal vide its order No. A/933-938/2002-NB(D) dated 20.8.2002 remanded the matter to the Commissioner for fresh decision, in the light of observations made by them. Accordingly, the present impugned order stand passed by the Commissioner.
4. After going through the impugned order, I find that the main basis for alleging the evasion of duty is as follows:
(i) consumption of sugar
(ii) Private register showing the production and sale of three months recovered from the assessee office
(iii) Recovery of some challans from dealers of the assessee.
5. It is seen that earlier the show cause notice made the consumption of sugar as a basis for arriving at the activities of clandestine removal. The Tribunal in the above referred order observed that the Commissioner while confirming the demand has taken into account the consumption of milk and as such, traveled beyond the show cause notice. One of the reason for remand of the matter was to decide the issue on the basis of consumption of sugar.
6. While deciding on the above basis, Commissioner has observed as under:
24.10 As regards the demand on the basis of consumption of sugar the assessee have submitted that the sugar was being used in other preparations also besides preparation of basic mix such as chikki, orange bar syrup, crunchy chocolate, ripples etc. In this regard I find that the Range Superintendent of Central Excise range-IV Bhopal vide his letter dated 26.04.2001 has verified the assessees claim and certified that sugar was being used by them for the preparation of basic mix, orange bar syrup, for making chikki for butter scotch and crunchy chocolate, for making ripples. He has also certified the total sales of orange bars, butterscotch, and crunchy chocolate and ripple flavor ice creams as submitted by the assessee. Thus after going through the report of the range Superintendent I find that the quantity of ice cream manufactured can not be determined correctly by taking consumption of sugar because sugar is being used in manufacture of other goods also which have a high sugar base. I also agree with the assesses contention that during the process of manufacture sometimes some quantity of raw material is also turned into waste, which can not be re-cycled or re-used in food industries. Taking all these aspects into consideration I find that the difference in the quantity of sugar accounted for in the raw material register and that used in the manufacture of ice cream is very nominal, the reason for which is quite understandable because of the other goods manufactured by using sugar. Further in this regard I also find that the Investigating Officers have failed to produce any tangible evidence to prove clandestine removal. The charge of clandestine removal is required to be proved by the revenue. In this situation I also rely upon citations of judgments/decisions given by the Apex Courts and Tribunal already mentioned in the above paras.
7. I do not find any infirmity in the above view of the Commissioner. He has relied upon the Range Central Excise authorities report to support his views that inasmuch as the assessee was also engaged in the manufacture of various types of other products, requiring use of sugar, the said fact cannot be made the basis for clandestine activities. Otherwise also, I find that it is well settled law that charges of clandestine removal cannot be made on the basis of alleged consumption of one of the raw materials.
8. As regards the second evidence, he has observed as under :
24.9 As regards the second evidence i.e., a private register recovered from the assessee office I again find from the records that no corroboratory evidence of supply of the goods mentioned in the register, their transportation and receipt of the payment has been relied upon or produced by the investigating agency. I fully agree with the plea of the assessee that mere entries in the private register, which is being disowned by them since beginning, could not be made basis for holding that there was clandestine production and removal of the goods by them without corroboration from other sources. Further this register has entries only for the period March 1998 to July 1998 (03.07.1998), whereas the demand on the basis of sugar consumption has been calculated for the entire period 1995-1999. Obviously the demand for the period from March 1998 to July 1998 is also covered in the entire demand calculated on the basis of consumption of sugar. Apparently the demand on the basis of register is overlapping because the period covered in this register is already covered by the entire period of demand for 1995-1999. I find from records that this register was being disowned by the assessee right from the beginning. Therefore in the absence of any reliable/tangible evidence the demand on this ground does not sustain on merits.
9. On going through the above, I fully agree with the adjudicating authority that in the absence of any corroborative evidence, finding of clandestine removal cannot be upheld.
10. Similarly in respect of third issue the appellant authority has observed as under:
24.7 As regards the challans recovered from the dealers of the assessee I find from records that the investigating officers have not brought any evidence to co-relate the same with any other evidence such as transportation of goods, receipt of payment for such supplies.
11. Again in the absence of any direct evidence indicating any clandestine removal on the part of the respondents, I find no infirmity in the above view of the adjudicating authority.
12. Accordingly, Revenues appeal is rejected.
(Pronounced in the open court on )
( Archana Wadhwa ) Member(Judicial)
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