Commissioner of Central Excise vs Kuber Tobacco Products (P) Ltd.

The Revenue claims to be aggrieved by the order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) in Excise Appeal No. 2196/2006-EX(SM) [2014 (307) E.L.T. 591 (Tribunal)]. It urges that the CESTAT''s confirmation of the findings of the lower authorities is contrary to the facts on the record and therefore, based on a perverse appreciation of the materials. The brief facts are that the assessee was manufacturing at the relevant time tobacco products in the vicinity of its factory. Pursuant to investigations, tobaccos produced were seized from its godowns.

During the course of investigation the statements recorded by the occupiers of the godowns indicated that the tobacco in the premises had been stolen by the employees of the assessee. Based upon this and other materials an addendum was issued on 10-9-2002 and original show cause notice was also issued on the 16-11-2001. By the Order-in-Original, the adjudicating authority confirmed the show cause notice besides levying the duty element, and also imposed diverse penalties on various individuals connected with the assessee.

The assessee preferred an appeal to the Commissioner (Appeals), which by order dated 31-3-2006 was allowed. The material part of the discussion by the Appellate Commissioner is at Paras 12 to 18 of his order. The Appellate Commissioner held that the Revenue had failed to establish any nexus between the ownership of the brand and the manufacturing unit and had consequently fallen into error in confirming the show cause notice and the demanding duty as well as penalty. The Appellate Commissioner noticed significantly that at some stage a report was sought from the local Revenue officials about the godowns, particularly its ownership based upon the records available. However, the Revenue was unable to secure any substantial evidence in that regard. Therefore, the Appellate Authority relied upon the decisions in Oudh Sugar Mills v. UOI - 1978 (2) E.L.T. 172 (S.C.), Collector of Central Excise v. Ratna Fireworks - 2005 (192) E.L.T. 382 and other decisions (para 13) and set aside the findings of the adjudicating authority.

The Tribunal in the impugned order confirmed the Order-in-Appeal by noticing that -

"There is virtually no evidence lending any credence to the said allegation. On the contrary, certain persons have surfaced during investigation and have claimed the ownership of the said goods. In the absence of any evidence showing that the goods in question were manufactured by the respondent and were cleared by them without payment of duty, I find no reasons to disturb the findings of Commissioner (Appeals)."

This Court is of the opinion that the above findings of the Commissioner (Appeals)''s show that he has elaborately discussed the evidence. This approach can hardly be characterised as perverse or unreasonable appreciation of evidence to warrant interference or to impel to conclude that substantial question of law arises.

The appeal is therefore, meritless and consequently dismissed. Applications are also disposed of as infructuous.