CESTAT quashes Demand of Excise Duty Imposed for Clandestine Manufacturing and Clearance of Cigarettes on Ground of Absence of Actual Manufacturer [Read Order]

The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the demand for excise duty imposed for clandestine manufacturing and clearance of cigarettes on the ground of the absence of an actual manufacturer. 

Raj Kumar Gupta (Alias), the appellant assessee was registered under the Central Excise under central excise registration and having its place of business at Sahadra, Noorpur, and was engaged in the business of manufacturing cigarettes of different brands classifiable under Central Excise Tariff of the First Schedule to the Central Excise Tariff Act, 1985. 

The assessee appealed against the order passed by the Commissioner for confirming various demands and for the imposition of penalty alleging that the assessee suppress the production and clandestine removal of cigarettes without payment of central excise duty. 

Ankit Kanodia and Megha Agarwal, the counsels for the assessee contended that the levy of Central Excise duty was upon the manufacturer and that the assessee was not a manufacturer, rather Ankit Tobacco was the manufacturer of cigarettes. 

Further submitted that the entire demand raised on the assessee was based on the statements of the third parties which the assessee was not allowed to cross-examine even when the assessee had sought for cross-examination of the persons whose statements were relied upon to confirm the demands against him. 

P. K. Ghosh, the counsel for the department contended that the assessee was the actual manufacturer of the goods and the statements recorded during the investigation established that the assessee was the brain behind the manufacturing and clandestine clearance of cigarettes. 

The Bench observed that the revenue had not brought in any evidence to corroborate the allegation that the assessee was the actual manufacturer of the cigarettes and the assessee cited various loopholes in the investigation and argued that the demand of duty made and penalty imposed on him in the impugned order are not sustainable. 

The two-member bench comprising Ashok Jindal (Judicial) and K. Anpazhakan (Technical) quashed the demand for excise duty and penalty imposed while allowing the appeal filed by the assessee. 

To Read the full text of the Order CLICK HERE

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