Customs, Excise and Gold Tribunal - Mumbai
Parle Beverages Ltd. vs Commissioner Of Central Excise on 19 December, 1997
Equivalent citations: 1998(99)ELT468(TRI-MUMBAI)
ORDER Gowri Shankar, Member (T)
1. Application is for waiver of pre-deposit of duty of Rs. 67.00 lacs and penalty on the applicant imposed of Rs. l.00crore.
2. Advocate for the applicant explains that duty has been demanded on the finding that the applicant, a manufacturer of sweetened aerated waters (SAW), manufactured and cleared, without payment of duty from April, 1989 to January, 1994 a quantity of SAW. This has been determined by the Commissioner solely by calculating, according to the formula determined by M/s. Parle Exports Limited, manufacturer of the concentrate known as non-alcoholic beverage base (NABB) that a certain quantity of SAW can be manufactured of a given quantity of NABB. He says that this formula in the nature of a rough working guide and it is not possible to strictly adhere to this formula on account of various factors such as half filling, production leakages etc. There is no evidence whatsoever of clandestine removal of any goods. Demanding duty only on the basis of one raw material used would amount to invocation of the provision of Rule 173E. If it is to be done the requirement regarding fixation of norms are to be followed which has not been done. With one exception, the persons who have been questioned had stated that this formula could not be adhered to. On limitation, he contends that the applicant had furnished to the Department in 1987 the formula, in connection with a claim for set off of duty under Notification 325/86. Therefore, there can be no allegation of suppression of facts. He says that on a similar issue the Tribunal had accepted his offer to waive duty on it being covered by a bank guarantee. He however distinguishes the present case by saying that facts such as limitation did not apply in the earlier case, and the order itself is on a different footing from the earlier order. He says that there is no basis in the order for imposition of penalty. In addition to seeking waiver of deposit, he prays, on account of the fact that it is a recurring issue -14 notices have been issued and one earlier appeal pending before this Tribunal, the matter may be heard out of turn.
3. The Departmental Representative contends that the very fact that the applicant had noted the formula for the purpose of claiming set off of duty paid on the NABB shows that it considered it accurately workable. He says that this will however not operate as limitation because the Department did not apply the formula with regard to the RT 12 returns filed of the SAW products consequent upon the notification having been rescinded shortly after issue in 1987-88 prior to the period for which the demand is made. The applicant had, by not disclosing to the Department that production by it will not be in accordance with the formula had suppressed the production and clearance of SAW. He contends that the Production Manager Krishnan of Thumbs Up Beverages had said that it was his bounden duty to achieve the production of SAW in accordance with the formula. He says that during the investigation, the Department has taken into account, in determining the total quantity of SAW would have been produced, losses on account of breakages of filled bottles etc. are shown in the M5 register forms that the assessee maintained. He therefore opposes grant of stay of recovery or duty and penalty.
4. The Commissioner, in his order, has gone solely by the fact that the production of SAW was not in accordance with the formula. His view that, in arriving at the formula, the manufacturer of NABB would have taken into account the shortfalls that would arise seems prima facie to be nothing more than a presumption. He has also gone by the fact that evidence with regard to shortages occurring in other manners such as spilling from various machines has not been produced. It is settled law that clandestine removal must be established by the Department, and that it cannot be based on presumption. A mere shortage of finished product calculated solely on the basis of a formula which the supplier of NABB appears to have laid down as a guideline for the manufacture of SAW unsupported by evidence does not, prima facie, in our view, justify the demand for duty. The order also emphasises that the applicant has failed to produce proof, the burden of which is on the Department. The Commissioner has not indicated prima facie any basis for imposition of penalty. We therefore dispense with deposit of duty and penalty and stay the recovery thereof.
5. Taking note of the fact that 14 notices have been issued and are under adjudication and two appeals are pending, we consider this to be a fit case for out of turn hearing. We direct listing of this appeal, and appeal C/1744/96-Bom. on 9th February, 1998.