Custom, Excise & Service Tax Tribunal
Advance Crop Care I Pvt Ltd vs Commissioner Of Central Excise And ... on 14 October, 2025
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH-COURT NO. 4
EXCISE APPEAL NO. 52232 OF 2019
[Arising out of Order in Original No. 06-08/COMMR/CEX/IND/2019
dated 31.05.2019 passed by the Commissioner of CGST & Central
Excise, Indore]
M/S ADVANCE CROP CARE (I) PVT LTD ....APPELLANT
Factory At 20, 21,24 & 25, Industrial Area,
Rangwasa Road Rau, Dist. Indore (MP)
Vs.
COMMISSIONER OF CGST & CENTRAL
EXCISE-INDORE
.....RESPONDENT
WITH EXCISE APPEAL NO. 52233 OF 2019 [Arising out of Order in Original No. 06-08/COMMR/CEX/IND/2019 dated 31.05.2019 passed by the Commissioner of CGST & Central Excise, Indore] M/S ADVANCE BIO TECH INDUSTRIES ...APPELLANT AND RESEARCH INPUTS INDIA Factory at 21, 22, 23 & 24 Industrial Area, Rangwasa Road Rau, Dist. Indore (MP) Vs. COMMISSIONER OF CGST & CENTRAL ....RESPONDENT EXCISE -INDORE AND EXCISE APPEAL NO. 52371 OF 2019 [Arising out of Order in Original No. 06-08/COMMR/CEX/IND/2019 dated 31.05.2019 passed by the Commissioner of CGST & Central Excise, Indore] M/S ASHISH TIWARI .....APPELLANT Director of M/s Advance Crop Care (I) Pvt Ltd. Factory at 20, 21, 24 & 25, Industrial Area, Rangwasa Road Rau, Dist. Indore (MP) Vs. 2 E/52232/2019 & 2 Others COMMISSIONER OF CGST & CENTRAL ....RESPONDENT EXCISE -INDORE Appearance:
Ms. Priyanka Goel, Advocate for the appellant Shri Sanjay Jain, Special Counsel for the department CORAM:
HON'BLE DR. RACHNA GUPTA, MEMBER (JUDICIAL) HON'BLE MR. P. V. SUBBA RAO, MEMBER ( TECHNICAL ) FINAL ORDER NO'S. 51583-51585 /2025 DATE OF HEARING : 02/07/2025 DATE OF DECISION : 14/10/2025 P.V. SUBBA RAO
1. These three appeals have been filed by M/s Advance Crop Care (I) Pvt Ltd.1, Shri Ashish Tiwari2 and Advance Biotech Industries and Research Inputs India3 to assail the order dated 31.05.2019 passed by the Commissioner of Central Excise in which he decided the proposals made in three show cause notices dated 31.1.2014, 06.01.2015 and 27.12.2017. The appellants ACCIPL and ABTIARI manufactured excisable goods-
Micronutrient Fertilizers and other Pesticides, Fungicides, herbicides etc., during the period 2009-10 to 2013-14 and 07.08.2013 to 30.06.2017.
2. Acting on the intelligence that the appellants had manufactured and clandestinely removed finished goods, the Directorate General of Central Excise Intelligence 4 conducted 1 ACCIPL 2 Ashish 3 ABTIARI 4 DGCEI 3 E/52232/2019 & 2 Others simultaneous searches on 07.08.2013 at the premises of ACCIPL and ABTIARI and of Director of the two Companies Shri Ashish Tiwari. They found that the factories of ACCIPL and ABTIARI were burnt and gutted and could not get any records except the finished goods stock register. They detained finished stocks lying in the factory under Panchnama dated 07.08.2013. Since the records could not be retrieved, the officers searched the premises of the chartered accountant for the appellants M/s Bhatia Solanki & Associates and seized and recovered certain documents. In follow up, they recorded statements of various persons, investigated the matter further and issued a show cause notice dated 31.06.2014 proposing confiscation of the seized goods. Another show cause notice dated 06.01.2015 was issued demanding duty for the period 2009-10 to 06.08.2013. Both show cause notices were decided earlier by Order-in-Original dated 30.03.2017. On appeal by the appellants this Tribunal by Final Order No. 51934-51936/2018 dated 11.05.2018 the matter was remanded to the Commissioner as follows:
"7. Accordingly, on merit, he submits that from show cause notice, it is evident that the purchase of raw material by the appellant for manufacture of finished goods is barely 5% of such finished goods which substantiates the claim of appellants that there was no actual sale. No seller of raw material has been found. The sales shown by the appellant was never cross verified. In such case, the demand can be made only where the department had made enquiries from the buyer and rest of demand could not sustain.
8. However, the above aspects have not been examined by the lower authorities.
9. Learned representative for the department agrees that this is not a forum to examine all these aspects.
10. When it is so, then we set aside the impugned order and remand the matter to the original adjudicating authority to decide the issue denovo but by providing a reasonable 4 E/52232/2019 & 2 Others opportunity to the appellant with the liberty to provide fresh evidence, as per law. If the appellant will not co-operate, then law will take its own course.
11. In the result, all appeals filed by the appellants are allowed by way of remand."
3. Meanwhile another show cause notice was issued to the appellant on 27.12.2017 covering the period 07.08.2013 to 30.06.2017. In the order impugned in this appeal, the matters remanded by this Tribunal in the first round of litigation and also the proposals in the show cause notice dated 27.12.2017 have been decided.
4. We have heard Ms. Priyanka Goel, learned counsel for the appellant and Shri Sanjay Jain, learned special counsel for the Revenue and perused the records.
5. The details of the duties confirmed, penalty imposed and confiscation of goods in the impugned order are as follows:
ORDER IN OIO NO. 06-08/COMNMR/CEX/IND/2019 ORIGINAL (OIO) dated 31.05.2019 Period of involved in 2009-10 to 2013-14 (upto 06.08.2013) and the appeal 07.08.2013 to 30.06.2017 Central excise demand 1. Confirmed duty in respect of SCN confirmed dated 06.001.2015 Rs.8,62,61,534/- against M/s Advance Crop Care (I) Pvt Ltd under section 11A (1) presently section 11A (4) of Central Excise Act 1944. (earlier Rs.
15,20,95,987/-) along with penalty of Rs.8,62,61,534/- under erstwhile section 11AC (Now Section 11 AC (1)
(a)) of Central Excise Act 1944 Rs.1,41,90,255/- against M/s Advance Bio Tech Industries and Research Inputs (India) under provision to section 11A(1) presently Section 11A (4) of the of Central Excise Act 1944 (earlier Rs. 5,47,80,201/-) along with penalty 1,41,90,255/ under erstwhile section 11AC (Now Section- 11 AC (1)
(a)) of Central Excise Act 1944 5 E/52232/2019 & 2 Others Imposed penalty of Rs.50,00,000/-
upon Ashish Tiwari (Noticee No. 3) under Rule 26(1) of Central Excise rule 2002
2. Confirmed demand in respect of SCN dated 27.12.2017 Rs. 39,67,694/- against M/s Advance Crop Care (I) Pvt Ltd. under section 11A (1) presently section 11A(4) of Central Excise Act 1944(earlier Rs.
6,15,11,510/-).
Penalty 1. Imposed penalty in respect of SCN dated 31.01.2015 Imposed penalty of Rs. 20,00,000/-
upon M/s Advance Crop Care (I) Pvt Ltd. under Rule 25 of the Central Excise Rules, 2002 Imposed penalty of Rs. 2,00,000/-
upon Ashish Tiwari under Rule 26(1) of Central Excise Rules, 2002
2. Imposed penalty in respect of SCN dated 27.12.2017 Imposed penalty of Rs. 39,67,694/-
against M/s Advance Crop Care (I) Pvt Ptd. Under section 11AC (Now Section 11AC(1)(a) of Centrla Excise Act, 1944 Confiscation 1. Confiscation of goods in respect of SCN dated 31.01.2014 Confiscation of the goods seized in the premises at 1-D Industrial area Rangwasa Rau as per th Panchnama dated 22.10.13 valued at Rs.
2,17,90,120/- under Rule 25 of Central Excsie Rules, 2002
6. The common issue in all these appeals is that the appellants are alleged to have manufactured and removed pesticides and Fungicides etc., and other similar goods without paying central excise duty. During the relevant period ACCIPL was registered with the central excise department while ABTIARI was not registered with the central excise department. Acting on intelligence, DGCEI conducted searches. No records were 6 E/52232/2019 & 2 Others recovered from the factory because the factory was burnt. The adjacent unit ABTIARI was also completely burnt. Therefore, the premises of the appellant's CA M/s Bhatia Solanki and Associates was also searched and details of production of various insecticides were recovered from the accounts available in the computer of Bhatia Associates.
7. Since insecticides were regulated under the Insecticides Act, both ACCIPL and ABTIARI were registered with the Central Insecticides Board, Ministry of Agriculture. Further, insecticides were all sold through the Government Organization MARKFED, Bhopal and MP Agro. The details of the goods sold were also obtained from the MARKFED and MP Agro.
8. Based on this information the three show cause notices were issued to the appellants which culminated in the impugned order.
Submission of the appellant
9. Learned counsel for the appellant made the following submissions;
(i) The demand is barred by time as there is no wilful suppression of production with intent to evade payment of duty in this case and the appellant was under the bonafide belief that the products were exempted from payment of duty;
7
E/52232/2019 & 2 Others
(ii) The allegation of clandestine removal is based on third party documents and data recovered from the CPU of the of the Chartered Accountant office and based on MARKFED and MP Agro data;
(iii) The goods were correctly classified under central excise tariff heading 3002 as "antisera, other blood fractions, immunological products (including those from biotechnology), and vaccines, toxins, cultures of microorganisms and similar products" and not under CTH 3808 as "insecticides, fungicides and pesticides;
(iv) The allegation of clandestine removal has to be proved beyond doubt which has not been done in this case.
(v) The demand for subsequent period from 2013-14 to 2017-18 is not sustainable because once the department was aware of the appellant's activities it could not have invoked demand for extended period of limitation. Reliance has been placed on Nizam Sugar Factory vs. Collector of Central Excise, AP5.
(vi) Penalty is not imposable and interest is not recoverable from the appellant.
5 2006 (197)ELT 465 (SC) 8 E/52232/2019 & 2 Others Submission of the Revenue
10. Learned special counsel for the Revenue vehemently countered the submissions by the learned counsel for the appellant and submitted as follows:
(i) The appellant had wrongly claimed that the sale on the basis of which the demand was made included various products on which no excise duty was payable. In the impugned order, at paragraphs 14 & 15, the Commissioner discussed at length the exempted goods, namely, zinc sulphate manufactured by the appellant and also the value of the goods which have been traded by the appellant.
He excluded the value of both the exempted goods and the traded goods before determining the amount of duty payable. As recorded by the adjudicating authority in paragraph 15, the appellants never intimated about the trading activities nor were they registered as dealers with the central excise. Moreover, the appellants have not produced any evidence in support of their claim. They did not provide basic details like name of the goods, quantity of goods, date of purchase, name of sellers etc., to support their claim of trading activity. They did not mention the name of the premises where the trading activities took place and if they were the same premises as manufacturer's premises. They did not 9 E/52232/2019 & 2 Others submit any invoices, challans, transport details, payment details etc., to support their claim of trading. It is for this reason that the Commissioner has, in the impugned order, only excluded the value of trading of goods to the extent information was available and also the value of the exempted products.
(ii) MARKFED and MP Agro are the nodal agencies for channeling agricultural inputs including insecticides and pesticides in the State of MP. Information was received from MP Agro and MARKFED of respective districts has been discussed in detail in the impugned order evidencing that the appellant had cleared finished goods, namely, insecticides and pesticides to MP Agro and MARKFED and also received consideration for the same;
(iii) ABTARI is a manufacturer of excisable goods but it did not register with the Central Excise Department but it also supplied goods to MP Agro, the details of which were obtained from MP Agro;
(iv) The appellant contested the classification of the goods and asserted that deserved to be classified under 3002 as cultures of micro organisms. However, the clear fact is that the cultures of micro organism manufactured by the appellant were found to be insecticides and they were not Anti sera which fall under CTH 3082. It is for this reason the appellant 10 E/52232/2019 & 2 Others had registered itself with the - with the Government and sold the insecticides through MARKFED and MP Agro. Therefore, the assertion of the appellant that the goods fall under 3002 is not correct;
(v) The stock of the goods seized on 31.1.2014 shows the brand name, nature and use of the goods clearly as fungicides and insecticides. Even for this reason the appellant's contention that they were classifiable under 3008 cannot be sustained because they were not only found in the market as fungicides and insecticides were being sold as such. The details of the goods which were manufactured by the appellant are as follows:
Sr. Description of Goods Products Classification No. under CETA 1 Advance power Fungicide 38089290 (Tricodermaviride) 2 Neemed (Azadirictin) Insecticide 39089199 3 Ado Beba Insecticide 38089199 (Beauveriabassana) 4 Super Ad Fungicide 38089290 (Pseudomonsfluorescens) 5 Ado Car (Carbendazim) Fungicide 39089290 6 Adzo (Triazophos) Insecticides 38089199 7 Ad Phos (chloropyriphos) Insecticides 38089199 8 Ad Qoinal (Quinolphos) Insecticides 38089132
(vi) The appellant objected to placing reliance on sales register and other data retrieved from CPU of the statutory auditor on the ground that the procedure prescribed under section 36B of the Central Excise Act, 19446 was not followed. But the auditor, in his statement had clearly stated that the CPU was 6 Act 11 E/52232/2019 & 2 Others brought by the appellant to their office as Tally was ERP9, which does not allow the data to be kept in any of the device and, therefore, the entire CPU had to be brought in. Even the director of the company had, in his statement suggested to the officer to obtain the sale and purchase details from their CA and at no point of time, attempted to disown that Tally data available in CPU. Therefore, the contention of the appellant that the data collected from the auditor computers cannot be relied on is not correct.
(vii) As far as the quantification of the goods is concerned, the Commissioner deducted the value of zinc sulphate manufactured by the appellant (which was exempted) to arrive at the turnover of the goods manufactured.
(viii) The appellant contended the cross examination of the persons involved was not allowed. This submission is not correct the appellant had asked for cross- examination of the ten panchas who were witnesses to various panchnamas drawn in such searches proceedings. The adjudicating authority found that neither Shri Ashish Tiwari, Director nor any other Authorized Representative of the appellant had ever challenged the legitimacy or the sanctity of the panchnama proceedings. In fact, the Ashish Tiwari, in his statement dated 08.08.2013, said that were satisfied with the proceedings conducted by the 12 E/52232/2019 & 2 Others officers under Panchnama dated 07.08.2013 at his factory and godown premises.
(ix) In view of the above, there was no scope for cross-
examination any panch witness.
(x) The appellant also contended that there was no evidence of unaccounted for production. The Adjudicating authority found that both ACCIPL and ABTIARI had manufactured goods which were also specified as pesticides and insecticides. However, the appellant had not maintained records properly and for this reason that information had to be collected from third parties. In his statement dated 24.09.2013, Ashish Tiwari said that they maintained finished goods register, packing stock register, delivery challan, raw-materials stock register at their premises but the premises were burnt in fire on 26.09.2013. He suggested that the details would be available with their CA.
(xi) The impugned order passed by the Commissioner is correct and calls for no interference.
(xii) The appeals may be dismissed and the impugned order may be set aside.
11. We have considered the submissions advanced by learned counsel for the appellant and the learned authorized representative appearing for the department and perused the records.
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E/52232/2019 & 2 Others
12. This is the second round of litigation assailing the de novo order passed in pursuance of this Tribunal Final Order dated 11.05.2018. In the same order the proposals in a subsequent SCN dated 27.04.2017 issued for the subsequent period were also decided.
13. The first question to be decided by us in these appeals is if the goods manufactured by the appellant should be classified as insecticides or fungicides or they should be classified as cultures of micro organisms under CTH 3008. When classifying goods, it must be seen as to how the goods are marketed. Usually, in cases of alleged clandestine removal, not many documents are found. However, in this case, all the products manufactured by the appellant except zinc sulphate were being sold as fungicides or insecticides under Insecticides Act, through MARKFED and MP Agro-the governmental organizations. It is for this reason that substantial amount of data was available with these two Governmental Organizations which showed the quantities of insecticides sold. We do not agree with the submission of the appellant that these goods which were sold in the market as insecticides and which the appellant itself treated as insecticides under the Insecticides Act should, for the purpose of central excise, be treated as not insecticides but as merely as cultures of micro-organisms. Merely because the insecticides manufactured by the appellant have biological, rather than chemical origin, they do not cease to be insecticides or fungicides. We, therefore, find 14 E/52232/2019 & 2 Others in favour of the Revenue and against the appellant on the question of classification of the goods as insecticides.
14. The next question to be examined is the quantification of allegedly clandestinely removed goods. Learned counsel for the appellant vehemently opposed the demand on the ground that the data was collected from third parties and the demand should not be confirmed on that basis. It must be, however, be remembered that it is not always possible to obtain data of clandestine removal from the assessee. Invariably, some amount of investigation is required to determine the value of the goods clandestinely removed. It must also be remembered that when the DGCEI officers visited the factories of the appellant their offices and everything in them were gutted and there were no records. The Director of the appellant suggested that the data would be available in the office of the CA. It is for this reason the premises of the CA were searched and the data was obtained from the CA. The CA also explained that the entire CPU of the computer was brought to his office because "Tally software" of the version being used by the appellant did not allow copying of data. It is in that context that the data was taken from the appellant's CA's office. The other source of information of the DGCEI were records of MARKFED and MP Agro through whom the appellant sold insecticides/ pesticides. These are Governmental Organizations and we have no reason to doubt the authenticity of the information collected from them. 15
E/52232/2019 & 2 Others
15. Another contention of the appellant was that they were also trading in goods and their entire turnover cannot be taken as that of manufacture of goods. It was also contended that the alleged sale of insecticides did not match their purchase of raw materials. It was for these two reasons that this Tribunal had remanded the matter to the Original Authority in the first round of litigation. We find the Commissioner has, in the impugned order, confirmed the demand of excise duty only on such value of the goods which were confirmed by the MARKFED and MP Agro through whom the appellant had sold its pesticides. He also took into account the value of the exempted product zinc sulphate sold by the appellant and the value of the goods traded by the appellant and only then determined the amount of goods manufactured and clandestinely removed by the appellant. He also took into account the SSI exemption available to the appellant as a small scale industry and, thereafter determined the amount of duty payable. The details of the duty payable determined by the appellant are in the table below:
M/S ACCIPL Period Sales turnover Sales Sales turnover Sales Value of Value of Assessable Rate Central as per P & L Turnover as considered in turnover clearance of zinc Traded value (after of Excise a/c per sales SCN confirmed at sulphate goods SSI duty duty ledger(Tally) the buyer's (exempted under exemption % confirmed end Nfn no. 12/12 where CE. Sr. No. 10 applicable col. 5-6-7) 1 2 3 4 5 6 7 8 9 10 2009-10* 38419003 38540913 38540913 36792698 0 726660 21066038 10.3 2169802 2010-11 171933125 144416614 171933125 134755627 0 13725845 121029782 10.3 12466068 2011-12 0 0 407225085 233027623 25364390 9749830 197913403 10.3 20385081 (upto
16.03.2012) 17.3.12 to 422568721 420378310 15343636 0 0 0 0 12.36 0 31.3.12 2012-13 823720623 814540391 823720623 424478664 26871603 4951072 392655989 12.36 48532280 2013- 0 214629946 214629946 33246674 10348827 986005 21911842 12.36 2708304 14(upto 6.8.13) TOTAL 1456641472 1632506174 1671393328 862301286 62584820 30139412 769577054 86261534 16 E/52232/2019 & 2 Others M/S ABTIARI PEIROD Sals turnover as Sales turnover Sales Sales Assessable Rate of Central Excise per P &L a/c as per sales turnover turnover value duty % duty confirmed ledger (Tally) considered confirmed at in this order.
under the the buyer's
SCN end, which is
considered
for this order
1 2 3 4 5 6 7 8
2009-10 0 1047536 1047536 997653 997653 10.3 102758
2010-11 93047619 62157898 93047619 4721471 4721471 10.3 486312
2011-12 0 0 134333916 39161449 39161449 10.3 4033629
(upto
16.3.2012)
17.3.12 to 186516023 98052795 52182107 0 12.36 0
31.3.12
2012-13 0 200665843 200665843 77407414 77407414 12.36 9567556
TOTAL 279563642 361924072 481277021 122287987 122287987 141902555
16. No alternative figures or evidence have been put up by the appellant to counter the calculation by the Commissioner in the impugned order. We, therefore, are inclined to accept the calculation of the duty payable by the appellant as above.
17. The last submission of the appellant for the learned counsel is that the third SCN dated 27.12.2017 was also issued for an extended period covering 2013-14 to 2017-18. It is his submission that once appellant's activities including what they were manufacturing and how they were clearing them were known to the department, a show cause notice for the subsequent period could not have been issued by the department invoking extended period of limitation. We find force in this submission. It has been held by the Supreme Court in Nizam Sugar Factory (supra) that when all relevant facts are in the knowledge of the authorities when issuing the first show cause notice, the second and third show cause notice based on same or similar facts cannot be taken as based on suppression of facts on the part of the assessee. We, therefore, find that the demand of 17 E/52232/2019 & 2 Others duty for the period of third show cause notice needs to be confined to only the normal period of limitation. The demand confirmed in the impugned order with respect to this show cause notice is reproduced below:
Year 2013-14 Sr. Production UNIT QTY AMOUNT Rate of Duty No. Duty 1 Mix Neem Oil LTR 19510 6168771 12.36 762460 2 TRICODERMA VIRIDE KG 39357 8121734 12.36 1003846 1% WP (ADVANCE POWER) 3 TRICODERMA VIRIDE MT 21.2 2875230 12.26 355378 1% WP (ADVANCE POWER) TOTAL 17165735 2121685 YEAR 2014-15 Sr. PRODUCTION UNIT QTY AMOUNT RATE DUTY No. OF DUTY 1 TRICODERMA VIRIDE 1% KG 12987 2868801 12.36 354584 WP 2 Mix Neem Oil LTR 191 82533 12.36 10201 3 AD THIRUM 100 GM KG 140 43046 12.36 5320 4 CARBENDAZIM KG 762.5 519299 12.36 64185 +MANCOZEB 100GM 5 CARBENDAZIM KG 508 330943 12.36 40905 +MANCOZEB 250 GM 6 CARBENDAZIM+MANCOZEB KG 1494.5 896233 12.36 110774 500 GM 7 TATAL 4740855 585970 YEAR 2015-16 Sr. PRODUCTS UNIT QTY AMOUNT RATE DUTY No. OF DUTY 1 TRICODERMA VIRIDE KG 8481.2 2831307 12.5 353913 1% WP 2 TRICODERMA KG 394 48297 12.5 6037 HERZINIUM 1KG 3 TRICODERMA KG 225.5 29026 12.5 3628 HERZINIUM-500 GM 4 METARHIZIUM-500 GM KG 55126 12.5 6891 5 5 AD ZYME 10 KG KG 25410 722152 12.5 90269 6 AD ZYME 50 KG KG 12850 365197 12.5 45650 7 MIX NEEM OIL LTR 2615 1181169 12.5 147646 TOTAL 5232274 654034 YEAR 2016-17 1 AD ZYME KG 6750 1197000 12.5 149625 TOTAL 1197000 149625 18 E/52232/2019 & 2 Others YEAR 2017-18 (UPTO JUNE 2017) SR. NO. PRODUCTS UNIT QTY AMOUNT RATE DUTY OF DUTY 1 Mix Neem Oil LT 124.5 38623 12.5 4828 2 TRICODERMA KG 0 3612420 12.5 451553 VIRID 1% WP-
ADVANCE POWER 3651043 12.5 456380
18. The matter needs to be remanded the Commissioner only for the purpose of calculation.
19. In view of the above, we partly allow the Appeal no. 52232 of 2019 filed by ACCIPL restricting the demand in respect of the SCN 27.12.2017 to the normal period of limitation and setting aside entire penalty under section 11AC of the Act. Rest of the order is upheld. Appeal No. 52233 of 2019 filed by ABTIARI and appeal No. 52371 OF 2019 filed by Shri Ashish Tiwari are dismissed.
[Order pronounced on 14/10/2025] (DR. RACHNA GUPTA) MEMBER (JUDICIAL) (P. V. SUBBA RAO) MEMBER ( TECHNICAL ) Tejo