DHARAMPAL SATYAPAL Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) Whether, in the facts and circumstances of this case, the Tribunal was justified in upholding the order of the Commissioner dated 28-4-1998 with respect to (a) the excisability of the kimam and classification thereof under sub-heading 2404.49 prior to 23-7-1996 and under sub-heading 2404.40 w.e.f. 23-7-1996; (b) rationale for invoking the extended period of limitation under the proviso to Section 11A(1); and (c) eligibility for the benefit of pro forma/modvat credit in respect of the chewing tobacco kimam, is the question which arises for determination in these civil appeals filed by the appellant-assessee under Section 35-L(b) of the Central Excise Act, 1944 (hereinafter referred to for the sake of brevity as "the 1944 Act").

(2.) Briefly, the facts of the case are that M/s. Dharampal Satyapal (assessee), having its head office at 7/22, Ansari Road, Darya Ganj, New Delhi and factories at 96, Okhla Industrial Estate, Phase-III, New Delhi / E-1, Maharani Bagh, New Delhi was found engaged in the manufacture of compound (kimam) containing chewing tobacco under sub-heading 2404.40/2404.49. The assessee, a partnership firm, was not registered with the Central Excise Department as a manufacturer. The assessee appeared to have been manufacturing and clearing the said compound (kimam) without the knowledge of the department.

(3.) During the investigations carried out by the department, the assessee claimed that the compound (kimam) manufactured by them was moved in "balties" on stock transferred basis to their three branded chewing tobacco manufacturing factories located at 68/2, Okhla Industrial Estate, Phase-II, New Delhi; Noida (UP) and Barotiwala (HP). The assessee claimed that the compound (kimam) was an intermediate item, not marketable as such and was, therefore, not excisable. Enquiries were made by the department at Barotiwala (HP), where the assessee claimed to have transferred the compound (kimam). The said enquiries indicated receipt of the said compound (kimam) in balties at Barotiwala during the period 16-2-1995 to 20-12-1996.