SHIV RAJ TOBACCO Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THIS appeal has been filed by the appellants against the order in original dated 28 -11 -1977 passed by the Commissioner of Central excise e vide which he had confirmed the duty1 demand of Rs. 88,11,756/ - and imposed penalty of Rs. 50,00,000/ - on them.

(2.) THE appellants are engaged in the manufacture of pan masala classifiable under T.I. 68 of the erstwhile Tariff. They initially disputed the excisability of their product pan masala by filing writ petition in the Honourable Allahabad High Court but did not succeed as the High Court vide order dated 27 -9 -1995 dismissed the same holding that the product pan masala was not food or food preparation article under Notification No. 55/75 -C.E. dated 1 -3 -1975 as amended from time to time. The factory of the appellants was firstly visited by the official of the Excise Department on 6 -0 -1980 and pan masala valued at Rs. 1,73,846.60 was seized and they were issued show cause notice dated 3 -4 -81 for payment of duty on the value of the clearances of pan masala made by them during the period 1 -4 -1980 to 5 -11 -1980. On 5 -11 -1980 another seizure of the pan masala was made by the officials of the Excise Department from their factory premises which valued at Rs. 3,56,762.00. They were again issued show cause notice dated 20 -4 -1981 for confiscation of the seized goods and for payment of duty amount of Rs. 95,330.19 on the clearances made by them during the period 6 -10 -1980 to 5 -11 -1980. The; seized goods, however, were later on released by the Excise Department on the basis of interim order dated 24 -11 -80 passed by the Honourable Allahabad High Court in the writ petition of the appellants on their executing a bond containing their undertaking to pay the duty if ultimately the matter was decided against them by the Honourable High Court.

(3.) AFTER dismissal of the writ petition by the Honourable Allahabad High Court on 27 -9 -1995, the appellants were served with another show cause notice dated 20 -3 -1996 vide which duty demand on the clearances of the pan masala made by them during the period 1 -4 -1980 to 31 -3 -1985 was raised and penalty was also proposed to be imposed on them.