Custom, Excise & Service Tax Tribunal
Sri Ratikanta Ghadei vs Bhubaneshwar-I on 27 June, 2024
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
KOLKATA
REGIONAL BENCH - COURT NO.1
Excise Appeal No.75841 of 2014
(On behalf of Appellant)
(Arising out of Order-in-Original No.CCE/BBSR-I/06/2014 dated 19.03.2014 passed
by Commissioner of Customs, Excise & Service Tax, Bhubaneswar I)
(1) Sri Ratikanta Ghadei
Vill.-Paralsingha, Via-Kesinga, Dist.-Kalahandi
Appellant
VERSUS
Commissioner of Customs, Central Excise & Service Tax,
Bhubaneswar I
C.R.Building, Rajaswa Vihar, Bhubaneswar-751007, Odisha
Respondent
WITH Excise Appeal No.75842 of 2014 (On behalf of Appellant) (Arising out of Order-in-Original No.CCE/BBSR-I/06/2014 dated 19.03.2014 passed by Commissioner of Customs, Excise & Service Tax, Bhubaneswar I) (2) Kartika Chandra Behra Vill.-Oldi, PO-Fakirabad, Dist.-Kendrapar Appellant VERSUS Commissioner of Customs, Central Excise & Service Tax, Bhubaneswar I C.R.Building, Rajaswa Vihar, Bhubaneswar-751007, Odisha Respondent APPERANCE :
Shri N.K.Chowdhury, Advocate for the Appellant Shri S.S.Chattopadhyay, Authorized Representative for the Respondent CORAM:
HON'BLE MR.ASHOK JINDAL, MEMBER (JUDICIAL) HON'BLE MR.K.ANPAZHAKAN, MEMBER (TECHNICAL) FINAL ORDER NO.76191-76192/2024 DATE OF HEARING : 03 .06.2024 DATE OF PRONOUNCEMENT : 27.06.2024 2 Excise Appeal Nos.75841,75842 of 2014 Per Ashok Jindal :
The appellants are in appeals against the impugned order wherein the demand of duty has been confirmed against the appellants and penalties on both the appellants are also imposed.
2. The facts of the case are that an intelligence was gathered that the appellants were engaged in clandestine operation of Form, Fill & Seal (FFS) for packing machine in contravention of the provisions of the Chewing Tobacco and Manufactured Tobacco Packing Machines Rules, 2010 in an unregistered premise at village Paralsingha, Kesinga, Kalahandi without obtaining registration under Section 6 of the Act and Rule 9 of the Central Excise Rules and without giving due intimation to the department as required under Rule 6 of the Rules of the Chewing Tobacco and Manufactured Tobacco Packing Machines Rules, 2010. 2.1 Acting upon the said intelligence on 29.03.2012, the premises of the appellants were searched and found one packing machine running producing branded chewing tobacco (Khaini) under the brand name "Surya Chhap Arunadaya Special Bhang" of MRP Rs.2/-. On the front side of the said khaini pouches, the name and photograph of Bishnu Charan Ghadei and the Central Excise Registration of M/s Arunodaya Tobacco Industries were printed on the back side. 2.2 The Central Excise Registration was issued to M/s Arunodaya Tobacco Industries for manufacture of branded chewing tobacco in the premises at village Masanibandh, Kandel Road, Via-Kesinga, Dist.- Kalahandi, Odisha. The activity of manufacture of branded khaini was neither intimated to the Department nor any Central Excise duty paid 3 Excise Appeal Nos.75841,75842 of 2014 in respect of the impugned goods manufactured in the said premises at village Paralsingha. Hence the impugned finished goods i.e. undeclared packing machines and one vehicle loaded with finished goods were seized on a reasonable belief that they are liable for confiscation.
2.3 During the course of search, it was found three persons, namely,
(i) Sri Ratikanta Ghadei, (ii) Sanjay Kumar Manthan and (iii) Sri Manas Sahu, who were present inside the premises where the impugned goods were being manufactured with the aid of the packing machine. 2.4 The statements were recorded. The Appellant No.(1), inter alia, stated that the FFS packing machine, raw materials and vehicle belong to his father,Shri Bishnupada Ghadei and all the related bills belong with him. He has no knowledge since when the packing machine was in operation.
2.5 Later on, on 2nd April, 2012, the Appellant No.(1) intimated that the said packing machine was purchased on 16.03.2012 from M/s Hindustan Machine, Shantinagar Villa at a cost of Rs.25,000/- and brought the said machine to his residential premises and undertook the repair, procured some empty pouches from M/s Arunodaya Tobacco, which was lying for a long period as unused. The machine, thereafter, was installed and commenced production from 22.03.2012. The appellant has neither intimated nor paid any duty on their production. 2.6 After investigation, the machine, vehicle and the goods were seized and a verification of invoices was also done with the supplier of the machine, who stated that he has sold the same machine on 4 Excise Appeal Nos.75841,75842 of 2014 16.03.2012, which was procured by him from M/s Bedi Traders on 04.03.2012 as scrap packing machine and the same further repairing and functional condition, was also sold to the appellant. 2.7 On the basis of the said investigation, a show-cause notice was issued to the appellants to demand Central Excise duty amounting to Rs.1,74,50,807/- under the 2nd Proviso to Rule 9 of the Chewing Tobacco and Unmanufactured Tobacco, Packing Machine (Capacity Determination and Calculation of Duty) Rules, 2010 and for imposition of penalty under Rule 26 w.e.f. 01.04.2011 to 31.03.2012. 2.8 The appellant contested the show-cause notice, but the adjudicating authority held that the appellant has failed to substantiate the date of installation of machine, therefore, they are liable to pay duty w.e.f. 01.04.2011 to 31.03.2012.
2.9 Against the said order, the appellants are in in appeals.
3. The ld.Counsel for the appellants, submits that the demand is not maintainable against the appellant as the said machine was procured only on 16.03.2012 and the production was started on 02.03.2012 and the said fact has been verified by the Departmental Officers that the said machine has been purchased by the appellant from M/s Hindustan Machine, Shantinagar Villa on 16.03.2012. As the fact has been established by the appellant and the production has been started on 22.03.2012, therefore, the demand of duty prior to 22.03.2012 is not sustainable.
3.1 For the subsequent period, he states that the appellant is ready to pay the duty along with interest. To support his contention, he relies on 5 Excise Appeal Nos.75841,75842 of 2014 the decision of this Tribunal in the case of Goyal Tobacco Co.Pvt. Ltd. Vs. Commissioner of Central Excise & Service Tax, Jaipur I reported in 2017 (348) ELT 720 (Tri.-Del.). He also relies on the decision of the Hon'ble Rajasthan High Court in the case of Collector of Central Excise, Jaipur II Vs. Jupiter Industries reported in 2006 (206) ELT 1195 (Raj.).
4. On the other hand, the ld.A.R. for the Revenue, drew our attention the adjudication order and states that the appellant has produced the invoices later on, which is fabricated one, therefore, the demand is rightly confirmed.
5. Heard both the parties and considered the submissions.
6. We find that the demand has been confirmed in terms of Rule 18 (2) of the Chewing Tobacco and Unmanufactured Tobacco, Packing Machine (Capacity Determination and Calculation of Duty) Rules, 2010 on the premises that if the appellant has failed to prove the date of installation of machine, then the same is to be demanded from the 1st April of the respective financial year. Therefore, from the evidence produced before us, it is to be decided that the date of installation of the machine is on the basis of evidence placed before us or it is to be presumed that the same has to be taken up from the 1st April, 2012 in the absence of any material evidence. The appellant has produced invoices of the said machines, which is extracted below for better appreciation :
6
Excise Appeal Nos.75841,75842 of 2014 7 Excise Appeal Nos.75841,75842 of 2014 On the above evidence, we find that the said invoice has been issued on 16.03.2012 from Santi Nagar, Bhillai and the machine has to reach at Kalahandi. The fact of sale of machine by M/s Hindustan Machines has been verified. During investigation, it was found that M/s Hindustan Machines have sold the machine on 16.03.2012. The Revenue has alleged that this is a afterthought. We find that the investigation was done on 29.03.2012 and the invoices has been produced on 02.04.2012, which is within 2 or 3 days, but no evidence has been produced by the Revenue that the said invoice is not genuine as on the said invoices, the supplier of the machine has paid the VAT. In that circumstances, the premise goes benefit of doubt in favour of the appellant that they had been able to produce the invoices of the machine on 16.03.2012, which might have been installed within a week time and the claim of the appellant is that they have started production on 22.03.2012. In that circumstances, we hold that the appellant is liable to pay duty in terms of Rule 18 (2) of the Rules w.e.f. 22.03.2012 onwards and the same is liable to pay by the appellant along with interest and equivalent amount of penalty is also payable by the appellant.
7. As the appellant has been able to demonstrate that the machine has been purchased by them on 16.03.2012, the same has been installed in their factory. The same view has been taken by the Hon'ble Rajasthan High Court in the case of Jupiter Industries (supra), wherein it has been held that when there is no production in relation to 8 Excise Appeal Nos.75841,75842 of 2014 machine, which is not in existence, therefore, the duty cannot be demanded for the period prior to installation of machine.
8. In this case, the appellant has been able to prove with a documentary evidence and the packing machine has been supplied on 16.03.2012 from Bhillai. As the appellant is located in Kalahandi, therefore, production of machine starts w.e.f. 22.03.2012.
9. In that circumstances, we pass the following orders :
(i) The appellant is liable to duty in terms of Rule 18 (2) of the Chewing Tobacco and Unmanufactured Tobacco, Packing Machine (Capacity Determination and Calculation of Duty) Rules, 2010 w.e.f.
22.03.2012 along with interest and the appellant is liable to be penalized in their activity as they failed to intimate the Department in advance ;
(ii) The remaining demand is not sustainable against the appellant.
10. We pass the order accordingly by disposing the appeals.
(Pronounced in the open court on 27.06.2024) Sd/ (Ashok Jindal) Member (Judicial) Sd/ (K.Anpazhakan) mm Member (Technical)