COMMISSIONER OF CENTRAL EXCISE Vs. SARIN AND SARIN

JUDGEMENT

(1.) This appeal under Section 35G of the Central Excise Act, 1944 (the Act) by the Revenue arises from a decision of the Customs, Excise and Service Tax Appellate Tribunal, New Delhi (the Tribunal) dated 13 March, 2014 [: 2014 (310) E.L.T. 404 (Tri-Del.)]. The Revenue has formulated the following questions of law:

(2.) The essential facts are that the assessee was engaged in the manufacture of Pan Masala and Gutkha. The factory and the residential premises of the assessee, its partners and dealers were searched by the officers of the Department on 20 January 2003. The search was conducted in the presence of one of the partners of the assessee. During the search, unaccountable cash collectively amounting to Rs. 19,43,000/- was seized from the factory as well as residential premises of the partners of the assessee, namely, Sri Davi Sarin and Sri Anil Sarin. The search operation was also carried out at the premises of two dealers of the assessee, namely, M/s. Basudeo Prasad & Sons (Tobacconist) at Shyam Market, Johri Bazar, Agra and M/s. Jain General Stores, near Jama Masjid, Bharatpur (Rajasthan) on the same date. The search resulted in the recovery of several bags of Gold Mohar brand Zarda (Gutkha) and Pan Masala Sada at the premises of both the dealers.

(3.) The officers, during the physical stock taking of the raw material in the factory premises of the assessee, found shortage in the stock of cut supari, kattha, tobacco and laminated packaging material. On the basis of the material collected during the course of the search operation, two notices to show cause dated 16/17 July 2003 and 2 May 2005 were issued to the assessee and its dealers. The assessee and its dealers submitted their reply to the notices to show cause. Pertinently, it is admitted in their statement that there is a huge shortage of wastage of raw material and inconsistency and difference in their records, which they were unable to explain. No satisfactory reply was given in regard to the shortage of wastage in raw material. They have also admitted that the assessee had suppressed the production of Pan Masala and Gutkha. The assessee had also voluntarily deposited Rs. 25 lacs Central Excise duty on the quantity of Pan Masala and Gutkha, which they had not shown in their records.