Page 260 - ELT_1_1st April 2020_Vol 372_Part

146 EXCISE LAW TIMES [ Vol. 372

[Order per : Bijay Kumar, Member (T)]. - All these appeals are filed
against the order dated 20-12-2017 passed by the Commissioner of Central Excise
and Customs Raipur (Chhattisgarh) vide which a demand of Central Excise duty
amounting to Rs. 16,95,33,000 (Rs. Sixteen Crores Ninty Five Lakhs and Thirty
Three thousand) only, under Section 11A of Central Excise Act, 1994 (for short
‘Act’) along with penalty of equal amount under Section 11AC of the Act. Ld.
Adjudicating Authority has also imposted penalty of Rs. 2,00,00,000/- (2 Crores)
under Rule 26 of Central Excise Rules, 2002 ( for short referred to as Rules) upon
Shri Ram Gopal Agnihotri, Director of the Company. Being aggrieved by the im-
pugned order the appellants are in appeal before this Tribunal.
2. Brief facts of the case are that the appellant is registered with the
Central Excise Department and engaged in the manufacturing of Chewing To-
bacco (CT) and Zarda Scented Tobacco (ZST) falling under Chapter Heading
2403 99 10 and 2403 99 30 of the 1st Schedule to Central Excise Tariff Act, 1985
(for short CETA). The product, namely, zarda scented tobacco and chewing to-
bacco, are goods notified under Section 3A of the Act and consequently leviable
to Central Excise duty on these goods are as per the provisions of Chewing To-
bacco and in the Manufactured Tobacco Packaging Machine (Capacity Determi-
nation and Collection of Duty) Rules, 2010 (for short referred to as ‘compounded
levy’). The appellant No. 2, Director of the appellant company and is responsible
for entire operation relating to manufacture and sale of the aforestated goods.
3. Acting on the intelligence, that the appellant is manufacturing and
clearing Zarda Scented Tobacco (ZST) in the guise of Chewing Tobacco (CT) and
paying less amount of Central Excise Duty under compounded levy scheme. The
officers of Director General of Central Excise Intelligence, Zonal Units, Bhopal,
searched the factory of Kay Pan Sugandh Pvt. Ltd. on 27-10-2015 in the presence
of Ram Gopal Agnihotri and resumed several incriminating documents and the
samples of raw materials, finished products and pouches. The Statements of Shri
Ram Gopal Agnihotri was also recorded under Section 14 of the Act on 27-10-
2015, wherein he, inter alia, deposed that the unit is using raw tobacco and ki-
wam for the manufacturing of the tobacco products. He also stated that kiwam
and tobacco are the main ingredients of Zarda Scented Tobacco (ZST) and Chew-
ing Tobacco (CT). Further kiwam is tobacco dust with different spices (ilaichi,
jayafal etc.) and stated that kiwam which is used for manufacture of ZST con-
tained edible flavouring agent kewada, khus and gulabjal. Kiwam which is used
for chewing tobacco does not contain any flavouring agent while in the ZST, the
kiwam is used.
4. Similarly, searches were conducted by the officers of DGCEI Bhopal
in the factory premises of M/s. Kaypan Masala Private Limited, Bhopal and it
was found that they are also engaged in manufacturing of tobacco product (CT
and ZST) under similar brand name of ‘black label’ and ‘red label’ as that of M/s.
Kay Pan Sughandh. The officers also drew samples of raw tobacco, processed
tobacco, kiwam and packed tobacco in pouches with ‘black label’ and ‘red label’
brand. The samples were also recovered from the premises of M/s. New Fancy
Tobacco Works, Lucknow, which were the kiwam supplier to the appellants. The
Statement of proprietor of the company M/s. New Fancy Tobacco Works, Luck-
now, was also recorded under Section 14 of the Act on 14-1-2016 who explained
the process of manufacture of kiwam supplied by them to the appellants for use
in the manufacture of CT and ZST.

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