Customs, Excise and Gold Tribunal - Delhi
Prakash Tobacco Ltd. vs Commissioner Of Central Excise on 2 November, 1998
Equivalent citations: 1999(107)ELT104(TRI-DEL)
ORDER P.C. Jain, Member (T)
1. Briefly stated the facts of the case are as follows :-
2. Central Excise Officers checked in transit a Truck No. AMU 8908 on 19-12-1987 containing Prakash Brand and Appu Brand Chewing Tobacco. On demand by the Officers, the Driver of the Truck produced a bill dated 18-12-1987 purported to have been issued in respect of the consignment loaded on the said Truck. The bill indicated that the goods had been removed from the duty paid premises of the appellant's Company herein. The contents of the said bill along with a letter produced by the Truck Driver indicated that the said 398 bags loaded on the Truck had paid Central Excise Duty vide A.R.I. No. 183/87-88, dated 9-12-1987 and cleared vide gate pass No. 11, dated 9-12-1987.
3. In his statement dated 19-12-1987, Shri Mohammad Samad, Driver of the Truck confirmed that the aforesaid consignment of the goods having been loaded from the factory premises of the appellant herein at Kaimganj. The Conductor of the Truck corroborated the statement of the Driver.
4. On further investigation it was found that the particulars of the A.R. 1 and G.P. 1 referred to in the Bill and the goods receipt (bilty) did not refer to the consignment detected but only to 10 cartons consigned to one M/s. Prakash Chandra Dharampal, Fieldganj.
5. In response to the summons issued to Shri Girish Chandra Agarwal, Partner of the appellants' Company, a statement was recorded from him, wherein he admitted that the said goods had been removed from the factory premises in the evening of 18-12-1987 without payment of duty. In view of the sudden demand of chewing tobacco from a customer and they did not have the requisite amount of money to pay the duty on the full Truck load of the chewing tobacco, he intended to pay duty after receipt of the consideration of the goods from his customers.
6. Accordingly a Show cause notice dated 2nd February, 1988 was issued by the Assistant Collector as to why the goods be not confiscated and as to why the penalty be not imposed under various Rules of the Central Excise Act, 1944.
7. We may mention at this stage that the goods had been released provisionally by the concerned Assistant Collector on 14-1-1988 on execution of B-H Bond for Rs. 1,66,660.507- and cash security of Rs. 42,000/-. The vehicle was also ordered to be released on execution of a similar Bond on appropriate security.
8. On adjudication the goods were confiscated, giving to the owners of the tobacco an option, to redeem the said goods on charging of a fine of Rs. 42,000/-. A penalty of Rs. 20,000/- was also imposed under Rule 209 (on the appellants), the truck was released without confiscation since the Driver's malafides were not found.
9. On appeal the appellants herein did not succeed. Hence this appeal before the Tribunal. Ld. Advocate Shri J.S. Kapil submits that the appellants had taken a plea right from the beginning that the said chewing tobacco seized from the truck as aforesaid, was not a manufactured chewing tobacco but was only unmanufactured chewing tobacco produced by beating of unmanufactured tobacco and packed into bags after sewing there of and affixation of brand name was also made on the bags. He submits that the officers at the time of seizure itself had drawn three samples, obviously to find whether the said tobacco was manufactured chewing tobacco or unmanufactured tobacco. This point was mentioned by the appellants in their letter dated 31-12-1988 to the Deputy Collector for determination by the said Adjudicating officer. This point was also taken by the appellants before the adjudicating officer in their reply to the show cause notice. He has taken us through the relevant letter and the reply available on record. We find this submission to be correct. Ld. Advocate has submitted in the face of the specific plea having been made to the adjudicating Officer regarding the test report on the samples which was drawn by the seizing officers and the said report not being made the basis of classification of the goods, these goods cannot be classified as dutiable goods under Tariff Heading 24.04. They remained under Tariff Heading 24.01 on which there is no duty liability.
10. On this plea the adjudicating officer has observed as follows :-
"As far as the party's request for sending the samples for chemical analysis at quite later stage is concerned. I feel that party's insistance is quite unwarranted at this stage because neither during the course of investigation nor at the time of speaking provisional release the party had disputed classification of seized tobacco. On the other hand Shri Girish Chandra Agarwal, partner of the party simply admitted that seized tobacco was branded chewing tobacco and was manufactured in this factory viz. M/s. Prakash Tobacco Co., Kaimganj and was cleared without payment of duty for want of funds. Had there been any dispute regarding classification of seized tobacco, the test samples would have certainly been got chemically examined and results communicated prior to their provisional release as well as issuing the show cause notice."
11. As regards the non-dutiable character, ld. Advocate has drawn our attention to Boards tariff advice, available at page 9 and 10 of the paper book vide F No. 81/5/87-CX 3, dated 23-6-1987. Relevant portion of it is extracted below :-
"The Board has accepted the above views of the conference. Accordingly, it is clarified that un-manufactured tobacco merely broken by beating and then seived and packed in retail packets with or without brand name for consumption as chewing tobacco, which may be commonly known in the market as "Zarda" would be appropriately classifiable under Heading No. 24.01 of the Schedule to the Central Excise and Tariff Act, 1985 un-manufactured tobacco."
12. Ld. Advocate, therefore, submits that merely because a statement has been made, admitting wrong particulars on the invoice-arrd the accompanying bilty relating to clearance of the goods it cannot be held that the seized tobacco is manufactured tobacco in the absence of any test report for which samples had been drawn for which a specific request had been made by the appellants. He, therefore, prays for setting aside the impugned order and allowing the appear.
13. Opposing the contentions ld. JDR, K. Panchaksharan reiterated the aforesaid finding of the adjudicating authority with reference to this plea as already extracted above.
14. We have carefully considered the pleas advanced from both sides. We note that the samples were taken by the seizing officers at the time of the seizure of the goods as is apparent from the brief facts of the case as given in the order-in-original. The finding of the adjudicating authority that this plea of sending the samples for testing was taken at too late stage after the investigations were over and after the goods had been provisionally released is not of much significance when the samples were drawn by the seizing officers at the time of the seizure of the goods. The sample being in possession of the Revenue, these could certainly be sent to the Chemical Examiner to find out whether the seized tobacco was really manufactured tobacco or not. Revenue having failed to give any satisfactory finding on the basic question of the character of the tobacco, it cannot be held, only on the basis of the statement of the appellant Co.'s partner that the tobacco was manufactured tobacco and was leviable to duty under Heading 24.04. On this ground alone the impugned order is liable to be set aside. We order accordingly and the appeal is, therefore, allowed with consequential relief to the appellant.