Custom, Excise & Service Tax Tribunal
Kisan Biri Factory vs Siliguri on 30 April, 2025
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
EASTERN ZONAL BENCH: KOLKATA
REGIONAL BENCH - COURT NO. 1
Excise Appeal No. 76845 of 2016
(Arising out of Order-in-Appeal No. 45/SLG-C.Ex/2016 dated 12.08.2016 passed by
the Commissioner of Central Excise (Appeal-I), Kolkata 169, A.J.C. Bose Road,
Bamboo Villa (4th Floor), Kolkata-700 014
M/s. Kisan Biri Factory : Appellant
Vill + P.O. Phansidewa, Dist Darjeeling,
West Bengal
VERSUS
Commissioner of Central Excise & Service Tax, : Respondent
Siliguri Commissionerate
C.R. Building, Haren Mukherjee Road,
Hakimpara, Siliguri, West Bengal
APPEARANCE:
Shri S. P. Siddhanta, Consultant for the Appellant
Shri P. Das, Authorized Representative for the Respondent
CORAM:
HON'BLE SHRI ASHOK JINDAL, MEMBER (JUDICIAL)
HON'BLE SHRI K. ANPAZHAKAN, MEMBER (TECHNICAL)
FINAL ORDER NO.76035/ 2025
DATE OF HEARING: 25.04.2025
DATE OF PRONOUNCEMENT: 30.04.2025
ORDER:[PER SHRI K. ANPAZHAKAN] The present appeal has been filed by M/s Kisan Biri Factory (hereinafter referred to as the appellant) against the Order-in-Appeal No. 45/SLG-C.Ex/2016 dated 12.08.2016 wherein the Ld. Commissioner(Appeals), Siliguri, has rejected the appeal filed by the appellant against the Order-in- Original passed by the Ld. Additional Commissioner.
Page 2 of 20Appeal No.: E/76845/2016-DB
2. Brief facts of the case are that the officers of Central Excise conducted a search on the factory premises of the appellant on 19.08.2009 and found total biris of 7,79,840 labelled and un labelled (labelled 461650 + unlabelled 318280) against recorded stock of 1,67,000 unlabelled biris. Accordingly, investigation was initiated against the appellant. On completion of the investigation a SCN dated 04.02.2010 was issued demanding central excise duty of Rs.24,07,445/-. The notice also proposed confiscation of the biris which were found to be not accounted.
2.1. On adjudication, the Ld. Additional Commissioner has passed the following order:
(i) confiscated the excisable goods (Biris) seized valued at Rs. 1,24,065/- and in lieu of this confiscation, he ordered a redemption fine of Rs.
31,016/- under the provision of Rule 25 of the Central Excise Rules, 2002 and he appropriated the cash security amount against redemption fine under the provision of the said Rules;
(ii) confirmed the total demand of Central Excise Duty to the tune of Rs. 24,07,445/-under section 11A(2) of the C E Act, 1944 read with rule 8 of the said Rules for the clandestine removal and non accounting of excisable goods;
(iii) Ordered for payment of interest at the appropriate rate under section 11AB of the said Act read with rule 8 of the said Rules;
(iv) imposed penalty of Rs. 24,07,445/- under section 11AC of the said Act read with rule 25 of the said Rules, with an option to pay reduced penalty.
Page 3 of 20Appeal No.: E/76845/2016-DB 2.2. On appeal, the Ld. Commissioner (Appeals) has upheld the demands confirmed in the Order-in- Original vide the impugned order.
2.3. Aggrieved against the confirmation of the above demands, the appellant has filed this appeal.
3. The submissions made by the appellant are summarized below: -
(i) During the course of search, the officers found a total of 7.80 lakhs of biris (labelled and unlabeled). Out of this 7.80 lakh biris, 1.67 lakhs unlabeled biris were entered in the stock register and 6.10 lakh were purchased on 17.08.2009 and 18.08.2009 and the Appellant manufactured 3.03 lakh labelled biris which could not be entered in the register in the absence of Munim, who comes once in a week to write the accounts.
(ii) There is no duty up to 20 lakhs of unlabeled biris. Further, the unlableed biris were not kept in the factory. It is on record that the unlabelled biris were recovered from the residential premises. It is not known as to why the officers seized the unlabelled biris particularly 1,67,000 biris which were accounted for in RG 12A. Thus, the demand of duty on the 1.67 lakhs unlabelled biris accounted in their books of account is legally not sustainable.
(iii) The appellant also submits that they are also engaged in trading of jute, paddy etc. apart from stock business as per Panchayat's permission which added to his income.
Page 4 of 20Appeal No.: E/76845/2016-DB
(iv) As per Rule 10 of the Central Excise Rules, the appellant is required to maintain the records for manufacture of the dutiable goods. The Appellant continued to maintain RG 12A register, though the said register is not mandatory. They have kept the Register as per the provisions of Rule 10 of the Central Excise Rules and the same contains the particulars regarding description of the goods produced or manufactured, opening balance, quantity produced or manufactured, inventory of goods, quantity removed, assessable value, the amount of duty payable and particulars regarding amount of duty actually paid.
(v) The Appellant submitted that they had not maintained the Daily Stock Accounts (DSA) instead they maintained RG 12A. Had they maintained DSA, they would have been required to keep the stock of unlabelled biris in the said DSA. The unlabeled biris up to twenty lakhs being not dutiable, no records needs to be maintained. Wherever the Appellant decides to manufacture labelled biris from the unlabelled biris, the labeled biris would be manufactured and then the same are entered in RG 12A register. As per rule 25(1)(b) of the said Rules if any producer, manufacturer, registered person of a warehouse or a registered dealer does not account for any excisable goods produced or manufactured or stored by him then, all such goods shall be liable to confiscation. The unlabelled biris were not required to be entered in the register maintained under rule 10 of the said Rules and hence the appellant submits that the said goods are not liable to confiscation.
Page 5 of 20Appeal No.: E/76845/2016-DB
(vi) In the statement dated 19.08.2009, Shri Krishnapada Biswas stated to have purchased 1,91,000 biris on 16.08.2009 from Md. Rabibul and Sri Palash Biswas s/o Sri Kali pada Biswas on 22.12.2009 stated to have purchased 6,10,000 biris (from whom not mentioned), due to ensuing RamZan and Durga Puja when the binders would not bind biri. In spite of the explanation, the adjudicating authority has confiscate the biris, both labelled and unlabelled. The Ld. adjudicating authority failed to see the "ACCOUNT OF BIRI AS FOUND IN THE DOCUMENTS RESUMED FROM MD. RABIBUL, CONTRACTOR OF M/S. KISAN BIRI FACTORY", enclosed with the notice wherein C E duty has been charged on 1,90,000 and 6,10,000 sticks of unlabelled biris shown to have been supplied on 16.08.2009 and 18.08.2009 respectively. It is not known as to how the adjudicating authority can confiscate the goods on which he has confirmed duty. Moreover, the Appellant cleared the said goods after labelling on payment of duty after duly entering the same in their RG 12A register and filed monthly return accordingly. As stated in the notice, the seized goods were released provisionally on execution of bond and as per condition of the bond, the Appellant was required to produce the said released goods. The order for confiscation cannot be passed in the absence of goods. Hence the order of confiscation may be set aside.
(vii) The Appellant rely on the decision of the CESTAT, SZB, Chennai in the case of Commissioner of C. Ex., Coimbatore Vs. Jaya mills Ltd. reported in 2009(238) E.L.T. 189, Page 6 of 20 Appeal No.: E/76845/2016-DB wherein it has been held that stock of cotton yarn seized from factory, in absence of evidence on record to show that the goods were likely to be removed clandestinely, not justifiable. In the instant case there was no evidence found in the premises of the Appellant on search in support of any clandestine removal.
(viii) The entire case is based on 9(nine) sale bills of tobacco, ITRs, three cash memos and the statements, diary and loose sheets. The Appellant submits that they have categorically denied to have purchased the said 160 kgs of tobacco from M/s. Jay Hind Tobacco Store. Even if it is assumed that the purchase was genuine, the quantity of 4,57,143 sticks of biris ( 350 gms required to manufacture 1000 sticks of biri) could be manufactured using this 160 kgs of tobacco and by no stretch of imagination the evasion Central Excise duty could have been nearer to the amount demanded in the notice and confirmed in the impugned order. No attempt has been made to ascertain the quantity of probable manufacture at the time of investigation or at the time of adjudication by the Ld. Additional Commissioner.
(ix) The Income Tax Returns (ITRs) for the financial years from 2005-06 to 2008-09 have been relied upon, but the income shown in the said returns has neither been taken into account to calculate quantity of sales of biris, labelled and unlabelled, nor the submission made in the statement and reply to the notice that the Appellant has separate income from trading of stock business and pisciculture for which copy of Page 7 of 20 Appeal No.: E/76845/2016-DB the Trade Licence was submitted. While relying on the ITRs, the authority who issued the notice, did not care to see the computation of income enclosed with the above ITRs.
(x) The three cash memos relied upon by the authority were given for sale of labelled biri out of the stock of duty paid biris. The Appellant used to clear the labelled biris under Central Excise invoices showing consignee as 'Self' and from the said duty paid biris they sell biris to different retailers. The cash memoes are given at the time of sales. The authority who issued the impugned notice and confirmed the demands did not charge any duty on the quantity of biris sold under the three cash memos which is evident from the annexure enclosed with the notice.
(xi) The statements from Sri Krishnapada Biswas, prop. of the Appellant concern was recorded on 19.08.2009. In the said statement he stated, interalia, that he is purchasing kachha biris from Md. Rabibul for the last two years Md. Rabibul normally comes once in every week and he came last on 16.08.2009 when he delivered 1,91,000 sticks of biris. Before that he delivered biris almost three weeks earlier. Shri Biswas in his reply to the notice contended that he forgot the purchase of biris on 17.08.2009 and 18.08.2009 which have been purchased by his son Sri Palash Biswas and admitted by him in his statement) and the authority also charged duty on the said quantity of purchase which means that there is corroboration of contention with the allegation. But when he submitted that because of certain Page 8 of 20 Appeal No.: E/76845/2016-DB raid by the officers he forgot to tell his other business, the same was not accepted though the copy of the 'Trade Licence' was submitted. Moreover, his statement to the extent of purchase of biris from Md. Rabibul for last two years and that too normally once in a week, has not been accepted it is not known as to how in the annexure to the notice receipt of biris from January 2005, receipt of 1,00,000 biris per day has been shown. The statement cannot be taken in part when it is relied upon, the same should be in its entirety. In support of the same, the Appellant relied on the decision in the case of Commissioner of C. Ex., Kanpur Vs. Kapoor Print Pack Pvt. Ltd. reported in 2011(264)E.L.T.142(Tri.-Delhi)
(xii) the charge of evasion of duty has been levelled mainly on the basis of statement given by Md. Rabibul on 27.11.2009, his diary and some loose sheets. From the statement it can be seen that Md. Rabibul is only capable to sign his name. Md. Rabibul in Affidavit before the Executive Magistrate Siliguri on 20.05.2010 affirmed that on 27.11.09 at about 9 am when he was in Sonapur, Central Excise officers of Siliguri Anti-Evasion unit intercepted him and by force they tried to get statement implicating him in dealing with biri supply in Kisan Biri Factory. The said Affidavit has been found by the adjudicating authority as an afterthought and is guided by the Appellant and not acceptable. Even his statement is contrary to the statements given by Sri Krishnapada Biswas and his son, Sri Palash Biswas. The Ld. Additional Commissioner did not Page 9 of 20 Appeal No.: E/76845/2016-DB bother to see the contradictions and still went on to confirm the duty on the purchase of biris (unlabelled) from Md. Rabibul and he never considered as to whether the said unlabelled biris were labeled in the factory of the Appellant if the purchase is assumed as genuine. The Appellant relied on the decision of the CESTAT, WZB, Ahmedabad in the case of Rakesh G Agarwal Vs. Commissioner of Central Excise, Surat reported in 2011(264)E.L.T. 531, wherein it has been held that when the statements are retracted then it needs corroboration by independent evidence.
(xiii) The Appellant relied on the decisions of the Hon'ble High Court, Calcutta in the case of Raj Kumar Damani Vs. Union of India reported in 2010(257) E.L.T. 371 and of the Hon'ble High Court, Ahmedabad in the case of Commissioner of Cus. & C.Ex., Surat-II Vs. Shivam Synthetics reported in 2010 (258) E.L.T. 30.
(xiv) In view of the non availability of any mention of the name of the Appellant concern and without confirmation of the author of the said documents, the said documents of the third party are not reliable to allege supply of biris to the Appellant concern. In this regard, the Appellant relied on the decision of the CESTAT, SZB, Chennai in the case of Commissioner of Central Excise, Coimbatore Vs. Rajaguru Spinning Mills(P) Ltd. reported in 2009 (243) E.L.T. 280 (Tri.- Chennai).
Page 10 of 20Appeal No.: E/76845/2016-DB
(xv) The statements of Sri Palash Biswas given on 12.11.2009 and 22.12.2009 have been relied upon. From the said statements so enclosed with the impugned notice and findings of the adjudicating authority may be seen that parts of those statements have been relied, not the entire one. If the statement is relied upon, the same should be relied in its entirety. In case of Biswas, the income from other sources though stated with proof of 'Trade Licence' has not been not accepted. His statement of occasional purchase of kachha biri has not been accepted.
(xvi) The Appellant submits that clandestine removal is a serious charge which needs to be established with cogent and tangible evidence. There is no such evidence for clandestine removal brought on record in this case and hence the demands confirmed without any corroborative evidence is not sustainable. In support of this claim, the appellant relied on the decision in the case of of Arya Fibres Ltd. reported in 2014 (311) E.L.T. 529 (Tri.-Ahmd.).
3.1. Thus, the appellant prayed for setting aside the demands of duty, interest and penalty along with confiscation of the goods confirmed in the impugned order.
4. The Ld. Authorized Representative of the Revenue reiterated the findings in the impugned order. He submitted that the 9(nine) sale bills of tobacco, ITRs, three cash memos and the statements, diary and loose sheets recovered during the course of investigation establishes Page 11 of 20 Appeal No.: E/76845/2016-DB clandestine manufacture and clearance of the biris by the appellant. Accordingly, he contended that the demands have been rightly confirmed in the impugned order.
5. Heard both sides and perused the appeal documents.
6. We observe that the officers of central excise visited the factory of the appellant and on verification found total biris of 7,79,840 labeled and un labelled (labeled 461650 + unlabelled 318280) against recorded stock of 1,67,000 unlabelled biris. The list of seized goods as mentioned in the Notice are reproduced below:
(1) LabeledBiri (Room adjacent to toasting room):
3,03,160 sticks (contained in 5 bags) (2) LabeledBiri (in Store room adjacent to residential premises): 1,58,400 sticks (contained in 4 bags) (3) Unlabelled Biri (in toasting net): 64,840 sticks (4) Loose unlabelled Biri (in room adjacent to toasting room): 2,53,440 sticks (5) Tobacco 80 kgs (contained in 2 bags) 6.1. From the above, we observe that all the unlabelled and labelled biris were not seized from the factory. They were seized from the residence and the rooms adjacent to the factory. Further, we observe that there is no duty on unlabeled biris upto a clearance of 20 lakh sticks. The appellant has accounted the 1,67,000 unlabelled biris in the RG 12A account. Thus, we hold that the 1,67,000 unlabelled biris which were accounted for in RG 12A are not liable for seizure. We find that all the unlabelled biris found at the time of visit of the Page 12 of 20 Appeal No.: E/76845/2016-DB officers have been later labelled and cleared on payment of central excise duty. Similarly, the labelled biris found not entered in the register were also accounted and cleared on payment of duty.
Accordingly, we hold that the demand of duty on the 1.67 lakhs unlabelled biris accounted in their books of account as well as the labelled biris accounted in the books and cleared on payment of duty cannot be confiscated and duty cannot be demanded again on the same goods.
6.2. As per Rule 10 of the Central Excise Rules, the appellant is required to maintain the records for manufacture of the dutiable goods. Under the rule 10 of the central excise rules, the record maintained by the appellant should contain the particulars regarding description of the goods produced or manufactured, opening balance, quantity produced or manufactured, inventory of goods, quantity removed, assessable value, the amount of duty payable and particulars regarding amount of duty actually paid. In RG 12A, the appellant is required to keep the stock of all labelled biris liable to duty. Wherever the Appellant decides to manufacture labelled biris from the unlabelled biris, the labeled biris would be manufactured and then the same are entered in RG 12A register. In the present case, it is alleged that the appellant has not entered the 1,90,000 and 6,10,000 sticks purchased by them from the contractor. In this regard, the appellant have submitted that the Ld. adjudicating authority failed to see the "ACCOUNT OF BIRI AS FOUND IN THE DOCUMENTS RESUMED FROM MD. RABIBUL, CONTRACTOR OF M/S. KISAN BIRI FACTORY", enclosed with the notice wherein Central Excise duty has been charged on 1,90,000 and 6,10,000 sticks of Page 13 of 20 Appeal No.: E/76845/2016-DB unlabelled biris shown to have been supplied on 16.08.2009 and 18.08.2009 respectively. Further the Munim who enters the accounts in the register comes once in a week and enter the details in the register.
6.3. We observe that the appellant procures unlabelled biris from the contractor. In the impugned order on the basis of the statement recorded from the contractor, it has been alleged that the appellant has procured 1,00,000 biris per day from January 2005. However, we observe that the investigation has not done verification and confirm the same from Shri Palash Biswas. It is seen that the contractor retracted his statement by filing an affidavit before the Executive Magistrate. Thus, the retracted statement has no evidentiary value without any further corroboration.
6.4. We further observe that wherever the appellant decides to manufacture labeled biris, they label it and enter in the register. Thus, having unlabelled biris in the factory or residence cannot give rise to the conclusion that they have been kept for clandestine clearance. As per rule 25(1)(b) of the said Rules if any producer, manufacturer, registered person of a warehouse or a registered dealer does not account for any excisable goods produced or manufactured or stored by him then, all such goods shall be liable to confiscation. The unlabelled biris were not required to be entered in the register maintained under rule 10 of the said Rules. Under these circumstances, we hold that the said goods are not liable to confiscation and accordingly, we set aside the confiscation of unlabelled biris made in the impugned order.
Page 14 of 20Appeal No.: E/76845/2016-DB 6.5. It is also observed demand of central excise duty has been made mainly on the basis of the 9(nine) sale bills of tobacco, ITRs, three cash memos and the statements, diary and loose sheets recovered during the course of investigation. We take note of the appellant's submission in this regard that they have categorically denied to have purchased the said 160 kgs of tobacco from M/s. Jay Hind Tobacco Store. Even if it is assumed that the purchase was genuine, we observe that no attempt has been made to ascertain quantity of probable manufacture at the time of investigation or at the time of adjudication by the Ld. Additional Commissioner. We find that there is no evidence available on record to show that the appellant has manufacture labelled biris liable to duty by using those tobacco. The allegation in the impugned order is that the labelled biris manufactured by the appellant were subsequently cleared clandestinely without payment of duty. It is to be noted that clandestine removal is a serious charge which needs to be established with cogent and tangible evidence. There is no such evidence for clandestine removal brought on record in this case and hence the demands confirmed without any corroborative evidence is not sustainable. In support of this we rely on the decision in the case of Arya Fibres Ltd. reported in 2014 (311) E.L.T. 529(Tri.-Ahmd.). The relevant part of the said decision is reproduced below:
"40. After having very carefully considered the law laid down by this Tribunal in the matter of clandestine manufacture and clearance, and the submissions made before us, it is clear that the law is well-settled that, Page 15 of 20 Appeal No.: E/76845/2016-DB in cases of clandestine manufacture and clearances, certain fundamental criteria have to be established by Revenue which mainly are the following :
(i) There should be tangible evidence of clandestine manufacture and clearance and not merely inferences or unwarranted assumptions;
(ii) Evidence in support thereof should be of :
(a) raw materials, in excess of that contained as per the statutory records;
(b) instances of actual removal of unaccounted finished goods (not inferential or assumed) from the factory without payment of duty;
(c) discovery of such finished goods outside the factory;
(d) instances of sale of such goods to identified parties;
(e) receipt of sale proceeds, whether by cheque or by cash, of such goods by the manufacturers or persons authorized by him;
(f) use of electricity far in excess of what is necessary for manufacture of goods otherwise manufactured and validly cleared on payment of duty;
(g) statements of buyers with some details of illicit manufacture and clearance;
(h) proof of actual transportation of goods, cleared without payment of duty;Page 16 of 20
Appeal No.: E/76845/2016-DB
(i) links between the documents recovered during the search and activities being carried on in the factory of production; etc." (unquote).
6.6. We observe that the same view has been taken by the Tribunal, Ahmedabad in the case of Chandan Tobacco Vs Commissioner of Central Excise, Vapi, reported in 2011(270) ELT (87) (Tri-Ahd). The relevant part of the said decision is reproduced below:
"9. We find that the entire basis for raising and confirming the demand against the appellant is the declaration made by them in terms of Board's circular. We have gone through the said circular which requires the manufacturer of Gutkha, Pan Masala, Tobacco etc. to give intimation about the number of machines installed in their factory and the working capacity of the same. There is nothing in the said circular laying down that the manufacturers are required to discharge the duty liabilities in accordance with the declaration made by them. In fact, any contravention of the procedure detailed in the circular invited penal action only, as mentioned therein. The charges against the appellant are that they have clandestinely manufactured and cleared the Gutkha without payment of duty inasmuch as the production shown by them is less than the production declared in the declaration. Such charges are required to be proved independent of average production declared by the appellant.
Apart from the above reasons, there is virtually no other evidence on record to reflect upon the fact of clandestine manufacture and clearance Page 17 of 20 Appeal No.: E/76845/2016-DB of Gutkha. It does not require the support of any legal pronouncement to state that the charges of clandestine removal being quasi- criminal and serious charges are required to be proved by production of positive and tangible evidences. The inferences drawn on the basis of calculations cannot be made the basis for fastening of charge of allegation of clandestine removal. Reference in this regard made to often relied upon decision of Hon'ble Supreme Court in the case of M/s. Oudh Sugar Mills Ltd. v. UOI as reported in 1978 (2) E.L.T. (J172) (S.C.). Further reference made to Tribunal's decisions in the cases of M/s. Biharji Manufacturing Pvt. Ltd. v. CCE, Delhi - 2005 (186) E.L.T. 587 (Tri. - Del.), M/s. Klene Packs Ltd. v. CCE, Bangalore - 2009 (94) RLT 474 (CESTAT-Ban.) = 2009 (247) E.L.T. 271 (T), M/s. Durga Trading Co. v. CCE - 2002 (148) E.L.T. 967 (Tri.), M/s. Nutech Polymers Ltd. v.
CCE, Jaipur - 2004 (173) E.L.T. 385 (Tri. - Del.).
10. Further, the Hon'ble Supreme Court in the case of J.A. Naidu v. State of Maharashtra as reported in 1983 (13) E.L.T. 1611 (S.C.), has held that the suspicion, however grave, cannot take the place of proof. In the present case, we do not even find any suspicion against the appellant inasmuch as even according to the Revenue, their case is primarily and basically dependent upon the declaration of average production by the appellant and comparison of the same with actual production.
11. We also note that there is no allegation much less than any evidence of procurement of raw material, which are required for manufacture of such huge quantity of Gutkha.
Page 18 of 20Appeal No.: E/76845/2016-DB We fully agree with the ld. Advocate that in the absence of such evidence or the proof reflecting upon the clearance of the final product and in the absence of any identity of the buyer, mode of transport or receipt of consideration etc, the Revenue has miserably failed in establishing its case.
6.7. In the present case, it is a fact on record that there is no evidence of manufacture of labelled biris and clandestine clearance of the finished goods without payment of duty. In this case, we observe, the investigation has merely relied upon the statement of the contractor that he was supplying one lakh biris per day and arrived at the duty liability on that basis. The contractor has later retracted his statement and hence the statement has no evidentiary value without any other corroborative evidence of manufacture and clandestine clearance. In this case, we also observe that the investigation has not identified the persons to whom the said finished goods have been cleared. The transporters who have transported the goods have not been identified. No evidence on record regarding receipt of money in cash for the clandestinely cleared goods. In the absence of any corroborative evidence for manufacture and clandestine removal labelled biris manufactured out of the said 160 kgs of tobacco said to have been purchased from M/s. Jay Hind Tobacco Store, we hold that the allegation of clandestine clearance is not sustainable.
Page 19 of 20Appeal No.: E/76845/2016-DB 6.8. Further, the Income Tax Returns (ITRs) filed by the appellant for the financial years from 2005-06 to 2008-09 have been relied upon. In this regard, the appellant's contention has been that the income shown in the returns include income they received from trading of stock business and pisciculture. In support of this claim, the appellant has submitted the Trade Licence . We observe that the income declared in the returns does not show whether it was received from the sale of labelled biris cleared clandestinely. Thus, we hold that on the basis of the income declared in the ITRs it cannot be concluded that the appellant has clandestinely cleared labelled biris.
7. In view of the above discussion, we hold that the demand of central excise duty confirmed in the impugned order is not sustainable and hence we set aside the same. Since, the demand of duty is not sustained, the question of demanding interest and imposing penalty does not arise.
8. In the result, we pass the following order.
(i) We set aside the confiscation of the excisable goods (Biri) seized valued at Rs. 1,24,065/- Consequently, the redemption fine of Rs. 31,016/- imposed under rule 25 of the Central Excise Rules, 2002 is also set aside.
(ii) The confirmation of the demand of Central Excise Duty of Rs. 24,07,445/-, along with interest, is set aside.
(iii) The penalty of Rs. 24,07,445/- imposed under section 11AC of the said Act read with rule 25 of the said Rules is set aside.
Page 20 of 20Appeal No.: E/76845/2016-DB
9. Thus, we set aside the impugned order and allow the appeal filed by the appellant, with consequential relief, if any, as per law.
(Order Pronounced in Open court on 30.04.2025) (ASHOK JINDAL) MEMBER (JUDICIAL) (K. ANPAZHAKAN) MEMBER (TECHNICAL) RKP