The Mumbai bench of Customs, Excise And Service Tax Appellate Tribunal ( CESTAT ) viewed that evidence from panch witnesses without allowing cross examination is not valid and set aside the penalty under the Excise Act, 1944.
The appellant, Shri Raju Laxman Pachhapure, contends that no goods manufactured by him are concerned in this dispute. The appellant also contends that no plant and machinery belonging to him are concerned in this dispute. The appellant further contended that no premises for carrying out impugned manufacturing activity are or were in his possession.
The impugned order of Commissioner of Central Goods and GST, Kolhapur has fastened duty liability of ₹ 59,60,53,224/- for the period from March 2015 to August 2015 under section 11A of Central Excise Act, 1944 read with Pan Masala Packing Machines ( Capacity Determination and Collection of Duty ) Rules, 2008 along with appropriate interest under section 11AA of Central Excise Act, 1944, besides ordering confiscation with consequent penalty of like amount under section 11AC of Central Excise Act, 1944 and other penalties under Central Excise Rules, 2002.
The adjudicating authority has relied upon rule 17(2) of Pan Masala Packing Machines ( Capacity Determination and Collection of Duty ) Rules, 2008 as pertinent to the unit for carrying out manufacture without registering with central excise authorities that places the burden on a manufacturer to furnish evidence to the contrary failing which the production shall have been deemed to have occurred from 1st April of the year in which the facility is construed as operationalized.
The charging of electricity usage at the impugned premises from March 2013 was the basis on which the production at Old Chandur Marg premises has been deemed to have been functioning from 1st April 2015 and the Shahpur premises from 1st April 2014. As the duty liability was to be determined based on the highest of the ‘maximum retail price’ printed on the pouches, the value was taken at ₹ 1.50 per pouch leading to the quantification of the duty liability which is under dispute in this appeal.
The Food and Drug Administration ( FDA ) of the Government of Maharashtra, along with police officers, raided the premises at Old Chandur Road on 15th September 2015 which, having been widely reported in the media, as also further raid carried out on 19th August, 2015 in which tobacco products and packing machines were seized, led to officers of Kolhapur central excise office obtaining panchnama thereof along with other documents about the proceedings before and by, those agencies against, among others, the present appellant to commence the impugned proceedings.
It was found that both the Noticees have been adopting delaying tactics and showing a non-cooperative approach Without any valid reason to hamper the adjudication proceedings and prolong adjudication of the matter.
It was observed by the Tribunal that merely intimating to this office that they are about to file an appeal cannot be grounds for keeping the matter in abeyance. Moreover, they have not produced any evidence showing that they have filed an appeal with CESTAT which has stayed the continuance of adjudication proceedings.
A two-member bench comprising Mr C J Mathew, Member ( Technical ) and Mr Ajay Sharma, Member ( Judicial ) viewed that the seizure had not been effected by the central excise officers. Further viewed that, other than the statements of the appellant herein and few others, no effort had been made by the central excise authorities to link procurement of raw materials and channelizing of the finished product with the appellant herein. In the absence of such corroborative evidence, statements that may have, otherwise, supported circumstantial evidence are of no relevance.
The CESTAT held that the evidence on which the duty liability, and penalties, have been fastened on the appellant herein, has not been established even by preponderance of probability owing to non-establishment of relevancy of statements, as set out in section 19 of Central Excise Act, 1944, the matter requires fresh appreciation. The Tribunal set aside the impugned order and allowed the appeal by way of remand.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
