Receipts of Scented Tobacco does not prove Clandestine Manufacture of Gutka: CESTAT allows Appeal [Read Order]
The appellant sought inspection of the original Lorry Receipts which the Commissioner did not accede to.
![Receipts of Scented Tobacco does not prove Clandestine Manufacture of Gutka: CESTAT allows Appeal [Read Order]](https://images.taxscan.in/h-upload/2026/05/15/2137037-receipts-of-scented-tobacco-does-not-prove-clandestine-manufacture-of-gutkajpg.webp "Receipts of Scented Tobacco does not prove Clandestine Manufacture of Gutka: CESTAT allows Appeal [Read Order]")
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi Bench, allowed a Customs appeal and held that receipts of scented tobacco does not prove clandestine manufacture of gutka. In 2000, the Directorate General of CentralExcise Intelligence (DGCIE) initiated investigations into alleged clandestine manufacture and removal of scented tobacco. The case of the DGCEI...
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi Bench, allowed a Customs appeal and held that receipts of scented tobacco does not prove clandestine manufacture of gutka.
In 2000, the Directorate General of CentralExcise Intelligence (DGCIE) initiated investigations into alleged clandestine manufacture and removal of scented tobacco. The case of the DGCEI is that the appellant had clandestinely manufactured and cleared gutka during the period from April 1998 to February 2000.
The Commissioner of Central Excise discharged the show cause notice by order dated 26.02.2004. The department filed an appeal against this order which was disposed of with a direction to the adjudicating authority to re-check the documents and identify the Lorry Receipts of Sarita Roadways which are not accounted for and determine the question of clandestine removal.
The Adjudicating Authority confirmed the demand against the appellant and penalty was imposed under Section 11AC of theCentral Excise Act. The appellant sought inspection of the original Lorry Receipts which the Commissioner did not accede to.
The demand was confirmed with interest and penalty by the Commissioner. The counsel for the appellant then argued before the CESTAT that the photo copies of lorry receipts without giving inspection of originals and without accounting for non-production of the originals is not tenable in law.
The tribunal directed the adjudicating authority to verify all the Lorry Receipts after which it was adjudicated that merely on the basis of two raw materials namely Scented Tobacco and kimam, clandestine manufacture and clearance of Gutka could not have been worked out without evidence of receipts. The bench of Justice Dilip Gupta (President) and P. Anjani Kumar (Technical Member) accordingly set aside the order of the Commissioner and allowed the appeals.
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