Customs, Excise and Gold Tribunal - Mumbai
Bunty Foods (I) Pvt. Ltd. vs Commissioner Of Central Excise on 3 August, 2005
ORDER
Jyoti Balasundaram, Vice-President
1. The above appeals arise out of the order of the Commissioner of Central Excise, Mumbai, who had confirmed the duty demand of Rs. 37,05,621.25 against M/s. Bunty Foods (I) Pvt. Ltd., and imposed a penalty of equal amount under the provisions of Rule 173Q(1) of the Central Excise Rules, 1944 read with Section 11AC of the Central Excise Act, 1944, holding that the seized goods are liable to confiscation and imposed a redemption fine of Rs. 2000/-, and ordered recovery of interest as well as imposed a penalty of Rs. 3.00 lakhs on the Director Mr. Vinod Jashnani of M/s. Bunty Foods (I) Pvt. Ltd., and a penalty of Rs. 2.00 lakhs on M/s. Parle Products Ltd.
2. The duty demand has been confirmed on a part quantity of broken biscuits arisen in the course of manufacture of Parle-G Biscuits, on job work basis by M/s. Bunty Foods (I) Pvt. Ltd. Penalty has been imposed for non accountal of the broken biscuits as well as for non accountal of sugar syrup in the RG-1 register.
3. We have heard both sides. We find that the Director of M/s. Bunty Foods (I) Pvt. Ltd., had produced private register in which entries were made from 1-4-1996 for broken biscuits. The department has arrived at the percentage of broken biscuits for the entire period in dispute i.e., from October 1992 to March 1997 on the basis of the entries in this register and the percentage of 3.74% has been arrived at.
4. Further, the statement of the Director of M/s. Bunty Foods (I) Pvt. Ltd., is to the effect that the broken/loose/unfinished biscuits are recycled by first weighing the same and then grinding them into powder and adding in each batch, as per the availability for stocks of broken biscuits kg basis. The contract between M/s. Bunty Foods (I) Pvt. Ltd. and M/s. Parle-G Products Ltd. also provides for reprocessing, as seen from sub-clause (vi) of clause (VIII). There is no evidence of removal of the broken biscuits from the factory of M/s. Bunty Foods (I) Pvt. Ltd. In these circumstances, going by the statement as well as the register maintained for broken biscuits although only for the period 1-4-96 onwards, we accept the contention of the appellants that the broken biscuits were being recycled and used in the manufacture of fresh biscuits and therefore no duty liability arises on broken biscuits, as they were captively consumed and covered by the benefit of exemption for captive consumption under Notification No. 67/95. We therefore set aside the duty demand.
5. As regards penalty, we find force in the submission of the Id. Advocate for the appellants that penalty being equal to the duty demand on broken biscuits, the penalty is for non accountal of biscuits and there is no separate penalty for non accountal of sugar syrup. Since the duty demand on the broken biscuits is itself set aside, cause for imposition of penalty no longer survives. The penalties on M/s. Parle Products Ltd. and on the Director of M/s. Bunty Foods (I) Pvt. Ltd. are also set aside.
6. In the result, we set aside the impugned order and allow the appeals, with consequential relief, in accordance with law, after setting aside the confiscation of the seized goods.
(Pronounced in Court)