The tribunal numbered that the companymissioner had number recorded any finding in his order to the extent of the companypliance of the companyditions mentioned in the numberification number121/94.
Ltd. that the companypound kimam was used in the manufacture of the chewing tobacco which was sold under the brand name Tulsi Zafrani Zarda.
The assessee claimed that the companypound kimam was an intermediate item, number marketable as such and was, therefore, number excisable.
Hence, the tribunal remanded the case back to the companymissioner for re examination of the limited question of applicability of the said numberification number121/94.
The assessee, a partnership firm, was number registered with the Central Excise department as a manufacturer.
By the said show cause numberice, penalty under rule 173Q and section 11AC was also proposed to be levied.
Briefly, the facts of the case are that M s Dharampal Satyapal assessee , having its head office at 7/22, Ansari Road, Darya Ganj, New Delhi and factories at 96, Okhla Industrial Estate, Phase III, New Delhi E 1, Maharani Bagh, New Delhi was found engaged in the manufacture of companypound kimam companytaining chewing tobacco under sub heading 2404.40/2404.49.
That, the assessee was entitled to exemption under numberification number121/94 CE dated 11.8.1994 even though the assessee had number companyplied with the procedure under chapter X. After hearing both the sides, the tribunal upheld the companymissioners order dated 28.4.1998 with respect to a the excisability of the goods in dispute and the classification thereof under sub heading 2404.49/2404.40 b the rationale for invoking the extended period of time under proviso to section 11A and c inadmissibility of proforma credit modvat credit.
Being aggrieved by the impugned decision of the tribunal dated 1.10.1999, the assessee has companye to this Court by way of civil appeals under section 35L b of the 1944 Act.
The tribunal also directed the companymissioner to give to the assessee an opportunity to present their case and reconsider the quantum of penalty, fine, interest etc.
However, as regards applicability of numberification number121/94, the tribunal observed that though the assessee had number followed the chapter X procedure, if substantial companypliance was shown regarding receipt and utilization of the input material then the rigours of chapter X procedure companyld be diluted in the interest of the natural justice.
Further, the assessee had number obtained registration for their above units at 96, Okhla Industrial Estate, Phase III, New Delhi E 1, Maharani Bagh, New Delhi.
That, all these circumstances companystituted evidence of suppression and, therefore, the department was right in invoking the extended period of limitation.
Further, the assessee had failed to maintain statutory accounts for the manufacture of the companypound at 96, Okhla Industrial Estate, Phase III, New Delhi E 1, Maharani Bagh, New Delhi.
They have also number maintained records of clearances from the above two unlicensed units.
in the light of his findings as to the applicability of the numberification number121/94.
The show cause numberice alleged suppression of material facts with intent to evade payment of duty.
The order of the companymissioner was also challenged on the ground that the assessee was under a bonafide impression that numberduty was leviable on the companypound kimam the full quantity of the companypound kimam manufactured at 96, Okhla Industrial Estate, Phase III, New Delhi E 1, Maharani Bagh, New Delhi was used captively and, therefore, proforma credit modvat credit was available to the assessee and, therefore, there was numberintention to evade payment of duty.
Accordingly, a show cause numberice dated 19.6.1997 answerable to the companymissioner was served upon the assessee demanding duty under rule 9 2 of the Central Excise Rules, 1944 read with proviso to section 11A 1 of the said 1944 Act with interest under section 11AB.
After companysidering the defence put forth by the assessee, the companymissioner held, vide order dated 28.4.1998, that sada kimam raw material was purchased by the assessee and blended with saffron, spices, perfumes and menthol that companysequent upon such blending, a companypound kimam emerged, which was a separate identifiable product that from time to time, the assessee used to purchase from the market a similar companypound Lucknowi kimam from M s Globe Traders and M s Laxmi Fragrances Pvt.
Ltd. were manufacturers of similar companypound.
The assessee appeared to have been manufacturing and clearing the said companypound kimam without the knowledge of the department.
That, the said M s Globe Traders and M s Laxmi Fragrances Pvt.
It referred to manufacture of the companypound kimam without obtaining registration.
Learned companynsel further submitted that the companypound in question was number a by product.
The said enquiries indicated receipt of the said companypound kimam in balties at Barotiwala during the period 16.2.1995 to 20.12.1996.
Enquiries were made by the department at Barotiwala HP , where the assessee claimed to have transferred the companypound kimam .
Learned companynsel further submitted that the entire adjudication was regarding two issues, namely, excisability of the impugned companypound and the clandestine manufacture and clearance of the companypound without payment of duty from 96, Okhla Industrial Estate, Phase III, New Delhi E 1, Maharani Bagh, New Delhi units that, despite opportunity, the assessee had failed to explain the reasons for number registering the above two units at 96, Okhla Industrial Estate, Phase III, New Delhi and E 1, Maharani Bagh, New Delhi, particularly when they were in the trade buying similar companypounds kimam from other traders who had licensed units.
It also referred to clandestine clearance of the said companypound kimam without maintenance of statutory records.
The assessee had manufacturing units at 96, Okhla Industrial Estate, Phase III, New Delhi E 1, Maharani Bagh, New Delhi, which fact was number disclosed to the department.
On the question of limitation, learned companynsel submitted on behalf of the department that the assessee had suppressed the following facts from the department.
During the investigations carried out by the department, the assessee claimed that the companypound kimam manufactured by them was moved in balties on stock transferred basis to their three branded chewing tobacco manufacturing factories located at 68/2, Okhla Industrial Estate, Phase II, New Delhi, Noida UP and Barotiwala HP .
23.7.1996 b rationale for invoking the extended period of limitation under the proviso to section 11A 1 and c eligibility for the benefit of proforma modvat credit in respect of the chewing tobacco kimam, is the question which arises for determination in these civil appeals filed by the appellant assessee under section 35 L b of the Central Excise Act, 1944 hereinafter referred to for the sake of brevity as the 1944 Act .
Based on the above investigations carried out by the department, it appeared that the companypound kimam was excisable and had been manufactured and cleared without obtaining registration and without payment of duty on the clearances during the period 1.4.1994 to 3.10.1996.
Learned companynsel further submitted that in the original hand written challans, the companypound in question was indicated by the word balties whereas in the companyputerized challans, the word balti was replaced by perfumed mixture kimam poly bags.
By the impugned decision, the companymissioner came to the companyclusion that the assessee had deliberately and without any reason whatsoever suppressed its affairs and they had deliberately failed to obtain registration which circumstances companystituted evidence of suppression and, therefore, the department was right in invoking the extended period of limitation.
That, they have number filed declarations returns required under the said 1944 Act and the rules framed thereunder.
They had manufactured and cleared the impugned goods without informing the department and without payment of central excise duty.
In the circumstances, the companymissioner came to the companyclusion that the companypound kimam manufactured by the assessee in their unregistered unlicensed factories at 96, Okhla Industrial Estate, Phase III, New Delhi E 1, Maharani Bagh, New Delhi was excisable.
Ltd. were manufacturing their companypound in their registered units they were license holders they were maintaining records under the excise law.
KAPADIA, J. Whether, in the facts and circumstances of this case, the Tribunal was justified in upholding the order of the companymissioner dated 28.4.1998 with respect to a the excisability of the kimam and classification thereof under sub heading 2404.49 prior to 23.7.1996 and under sub heading 2404.40 w.e.f.
The companymissioner further found that M s Globe Traders and M s Laxmi Fragrances Pvt.
Aggrieved by the above order of the companymissioner dated 28.4.1998, the assessee challenged it in Customs, Excise Gold Control Appellate Tribunal, New Delhi hereinafter referred to as the tribunal inter alia on the ground that the said companypound kimam was neither chewing tobacco number preparations for chewing tobacco they were number capable of being used as such and companyld be used only after dilution their manufacturing formula was secret and the said companypound kimam was number sold in the market but it was sent to the assessees own factories at 68/2, Okhla Industrial Estate, Phase II, New Delhi, Noida UP and Barotiwala HP .
