DHARAMPAL SATYAPAL Vs. CCE

JUDGEMENT

(1.) M /s. Dharampal Satyapal, Shri J.D. Desai, Sr. Manager of M/s. Dharampal Satyapal and Shri Rajeev Kumar, Partner of Dharampal Satyapal had filed three separate appeals being aggrieved with the common Order -in -Original No. 18/98 dated 28.4.1998 passed by the Commissioner of Central Excise, Delhi -I.

(2.) UNDER show cause notice dated 19.6.1997 issued by the Commissioner of Central Excise, Delhi, it was alleged that M/s. Dharampal Satyapal and others had manufactured excisable and dutiable 'kimam', which was classifiable under sub -heading No. 2404.49 of the Central Excise Tariff during the period 1.3.1994 to 22.7.1996, and under sub -heading No. 2404.40 from 23.7.1996 onwards. The said goods have been described by the appellants by different names and hereinafter are referred to as 'Chewing Tobacco Kimam'. The said goods were manufactured by the appellants by mixing raw kimam/sada kimam with various ingredients such as menthol, aromatic spices, perfumes, saffron, musk, distilled water, etc. The said goods were excisable. No duty had been paid thereon and the goods had been removed clandestinely from the place of manufacture. No prescribed procedure had been followed. No central excise registration was obtained in respect of the premises where the said goods were manufactured. Demand of central excise duty amounting to Rs. 16,91,79,394.29 was demanded and extended period of limitation was invoked.

(3.) ALL the appeals were posted for hearing on 10.8.1999 when Shri V. Lakshmi Kumaran, Advocate appearing for Dharampal Satyapal and Ors. submitted that the appellants were purchasing "sada kimam", which was a tobacco extract, and were mixing with such sada kimam, various ingredients like perfumes, spices, saffron, etc. and as a result, a compound was formed which was sent to their other factories. It was his submission that there was no evidence that this compound was capable of being used as such. It was only after dilution that the compound was usable. He referred to the Tariff history and submitted that the compound was not a chewing tobacco. It could not also be called a preparation containing chewing tobacco. Their manufacturing formula was secret and the goods in dispute were not sold in the market. As regards the evidence about marketability as given in the show cause notice and relied upon by the adjudicating authority, he stated that the proportion with regard to those products of other manufacturers was not known. He admitted that Chapter 10 Procedure was not followed but argued that it will not make any difference to their claim that no duty was payable on the goods in dispute.