Jainendra Kumar Ranka, J. - (1.) In all these petitions a common question has been raised by the assessees, who are engaged in manufacture and sales of bubble gums, chewing gums, sugar candies etc. and all these assessees are manufacturing identical products but are being sold by different names, though by & large the content remains more or less the same. Therefore, taking into consideration the convenience and with the consent of the parties, all these petitions are being decided by this common judgment.
(2.) The facts of STR 473/2011 - M/s Perfetti Van Melle India (P) Ltd. v. Dy. Commissioner (Appeals) III, Commercial Tax Department Jaipur & Another, are being taken into consideration and only briefly the names of product of the various assessees would be later-on referred. 2.1 Brief facts are that all these assessees are Limited Companies and some of them are importing Sugar Candies from other States and being sold in this State, and are either manufacturing in the State of Rajasthan or/and have manufacturing units in Haryana, Tamil Nadu, Uttarakhand and other places in the country. 2.2 A survey came to be conducted at the business premises of assessee on 24.6.2010 and it was noticed during the course of survey and investigation carried thereafter, that the assessee is manufacturing branded confectionery goods and coco products and on some of the products the assessee is paying 5% tax and on some of the products the assessee is paying 12.5% or 14% tax. It was noticed by the officers that the asssessee, on some products, is collecting tax as per Schedule-IV @ 5%. Taking into consideration the ingredients in the products manufactured by the assessee, the Assessing Officer was of the, prima facie, view that as per the wrappers where ingredients are printed, it was noticeable that it contained nutritional information and accordingly taking into consideration the same, the AO was of the view that it is not classifiable under Entry 163 Schedule-IV and is a different product on which residuary rate would be applicable. The AO has given several examples in the assessment order by pointing out that the ingredients in products, namely- (1) Mentos Orange Flavour: Sugar, Liquid Glucose, Acidity Regulator(330), Hydrogenated Vegetable oil, Stabilizer, (414, 1400), Starch, Emulsifer (47,322) & contains Permitted Synthetic food colour and added orange flavouring substances. (2) Alpenliebe Choco : Sugar, Liquid Glucose, Condensed Milk sweetened Hydrogenated Vegetable oil, Cocoa Solids (3.03%) Edible Common salt (10Dized), Emuslifier (322) Acidity Regulator (500(ii) & contains Added Flavour (Natural, Natur, Identical and artificial (Chocolate), flavouring substances. (3) Alpenliebe Coffee : Sugar, Liquid Glucose, Condensed Milk sweetened (7.2%), Butter Fat, Coffee Extract (1.04%), Edible common salt, Hydrogenated Vegetable oil, Emulsifier (322), Cream (Low Fat), Antioxident (307) & contains Permitted Natural colour (150d) And added Flavour (Nature, Identical Flavouring Substances). 2.3 On behalf of the assessee, explanation was offered, inter alia, contending that the items being manufactured by the assessee are classifiable under Entry 163 by stating that the Sugar and Glucose contents are almost 98% and thus, would be covered by Entry 163 Schedule-IV. The AO, took into consideration the other products, namely Fruittella, Lollypop, Chlormint, Marble, also manufactured/produced by the assessee, and came to the conclusion that the products being sold by the assessee are primarily candies, which contain Hydrogenated Vegetable oil, Cocoa Solids, Coffee Extract, Stabilizers, Emuslifier, Synthetic food colour, Starch, Condensed Milk, Sweetened Hydrogenated Vegetable oil, Edible common salt, Acidity Regulator, Butter Fat, Cream (Low Fat), Antioxident etc. and thus, it is in the nature of branded confectionery/coco and would fall in Schedule-V. 2.4 The AO, taking into consideration the various ingredients as aforesaid, came to the conclusion that since the products are not classifiable in any specific Entry, therefore, they are not covered by any Entry of Schedule-IV or under any Notification under Schedule-IV and thus, would fall in Schedule-V being the residuary entry on which tax @ 12.5% / 14% may be applicable in different years, would be applicable. The claim of the assessee that the Entry 163 "Sugar Candy made of sugar and glucose but excluding coco", is clear and the product as it stands is in the nature of sugar candy, primarily of sugar, however, the same was rejected and the AO held that the case of assessee is covered by the judgment of Rajasthan High Court rendered in the case of CTO v. M/s. Heera Lal Murlidhar,1993 Taxworld 32. 2.5 The AO also held that the assessee had evaded the tax by filing wrong information and it had concealed the material particulars and thus levied penalty also u/s 61 of the Act. The AO also charged interest u/s 55 of the Act.
(3.) The matter was carried in appeal before the Dy. Commissioner (Appeals), before whom the facts were reiterated and the DC(A) taking into consideration the submissions of the assessee, upheld the finding reached by the AO by holding that it is nothing else but branded confectionery and cocoa products. However, insofar as levy of penalty is concerned, the DC(A) deleted the same.;