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M/s Amar Food Products & Another v/s C.C.E., Lucknow


Company & Directors' Information:- B. P. FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15311MP1994PTC032994

Company & Directors' Information:- S P P FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15412DL2004PTC128666

Company & Directors' Information:- J S FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15314OR1991PTC002964

Company & Directors' Information:- H R B FOOD PRODUCTS PVT LTD [Active] CIN = U15146WB1988PTC045281

Company & Directors' Information:- V D FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15400DL2012PTC231717

Company & Directors' Information:- AMAR P V C PRODUCTS PRIVATE LIMITED [Active] CIN = U25203GJ1996PTC029596

Company & Directors' Information:- P R FOOD PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U74899DL1989PTC030483

Company & Directors' Information:- S S FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15310MH2003PTC142530

Company & Directors' Information:- B K FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15312OR1996PTC004541

Company & Directors' Information:- O H P FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U52205DL1999PTC100269

Company & Directors' Information:- K V FOOD PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U15122DL2007PTC162739

Company & Directors' Information:- K. C. FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15431JK1982PTC000554

Company & Directors' Information:- K I C FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15316DL1979PTC009757

Company & Directors' Information:- R B FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15313DL2010PTC202753

Company & Directors' Information:- R K B FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15490KL2013PTC033500

Company & Directors' Information:- S K G FOOD PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U15419UP1991PTC013771

Company & Directors' Information:- B H FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15134DL1997PTC084273

Company & Directors' Information:- N S FOOD PRODUCTS PVT LTD [Strike Off] CIN = U15412WB1992PTC055591

Company & Directors' Information:- H N FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15146UP1990PTC011540

Company & Directors' Information:- V K FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15412UP1988PTC010023

Company & Directors' Information:- B M FOOD PRODUCTS PVT LTD [Strike Off] CIN = U15419WB1993PTC060386

Company & Directors' Information:- I K FOOD PRODUCTS PVT LTD [Strike Off] CIN = U15412WB1991PTC051852

Company & Directors' Information:- S S V FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15499AP1982PTC003547

Company & Directors' Information:- S Q P FOOD PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U15100MH2003PTC139217

Company & Directors' Information:- F S FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15311MH2000PTC126031

Company & Directors' Information:- Z K FOOD PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U15400MH2010PTC209818

Company & Directors' Information:- M B S FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U01112WB2003PTC096375

Company & Directors' Information:- N D FOOD PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U15131DL2002PTC115754

Company & Directors' Information:- C K M FOOD PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U51909KL1998PTC012358

Company & Directors' Information:- G S C FOOD PRODUCTS PVT LTD [Strike Off] CIN = U15316WB1985PTC038398

Company & Directors' Information:- A K G FOOD PRODUCTS PVT LTD [Under Liquidation] CIN = U15412WB1990PTC049789

Company & Directors' Information:- J M D FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15419DL1998PTC097578

Company & Directors' Information:- L K FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15200TG2016PTC103411

Company & Directors' Information:- FOOD PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U15431JK1966PTC000304

Company & Directors' Information:- R R FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15490PN2015PTC154753

Company & Directors' Information:- A N FOOD PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U15400TG2013PTC091969

Company & Directors' Information:- R V S K FOOD PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U15490DL2012PTC245851

Company & Directors' Information:- AMAR PRODUCTS INDIA PRIVATE LIMITED [Active] CIN = U24100MP2013PTC030974

Company & Directors' Information:- K G Y FOOD PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U15400KA1984PTC005909

Company & Directors' Information:- FOOD PRODUCTS (INDIA) PVT. LTD. [Strike Off] CIN = U15311HR1994PTC032356

Company & Directors' Information:- M K FOOD PRODUCTS PVT LTD [Strike Off] CIN = U15209DL1979PTC009924

    Central Excise Appeals No.288, 289 of 2005-SM

    Decided On, 16 June 2010

    At, Customs Excise Service Tax Appellate Tribunal Principal Bench New Delhi

    By, THE HONOURABLE MR. M. VEERAIYAN
    By, MEMBER (TECHNICAL)

    Shri Krishna Kant, Advocate for the appellants. Shri R.K Gupta, Authorized Departmental Representative (SDR) for the Revenue.



Judgment Text

Per M. Veeraiyan:


These two appeals arise out of a common order impugned order of the Commissioner (Appeals) No. 354 to 356-CE/2004 dated 29.10.2004/


2. Heard both sides.


3.1 The relevant facts, in brief, are that as per investigation, M/s Amar Food Products with Shri Chokey Lal as the proprietor, are registered manufacturers of pan masala and gutkha and M/s Radha Enterprises is a proprietary concern with Shri Ram Bharosey Sharma as proprietor, through whom the goods manufactured by M/s Amar Food Products were reportedly sold. The trucks carrying pan masala and gutkha were intercepted on three different dates and were found to have brought goods manufactured by M/s Amar Food Products without payment of duty but carrying sale invoices issued by M/s Radha Enterprises. The goods valued Rs.10,90,950/-were seized as having been cleared and transported without payment of duty. There were seizures at the premises of M/s Amar Food Products as well. During the course of investigation, at the request of M/s Radha Enterprises, the goods seized from the three trucks were provisionally released on execution of a bond and security by M/s Radha Enterprises. On completion of investigations, show cause notice dated 7.4.98 was issued to M/s Amar Food Products requiring them to show cause why the seized goods cannot be confiscated, why duty should not be demanded and penalty imposed. The show cause notice also directed M/s Radha Enterprises to show cause why penalty should not be imposed on them.


3.2 The original authority confiscated the goods valued Rs.10,90,950/- under Rule 173Q and imposed fine of Rs.6 lakhs in lieu of confiscation of the goods which were already released to M/s Radha Enterprises. He also imposed penalty of Rs.5 lakhs on M/s Amar Food Products. He also confirmed a demand of Rs.3,27,159/- on M/s Amar Food Products in the goods removed in the three trucks. In addition, he imposed penalty of Rs.1,10,000/- on M/s Radha Enterprises and there are other aspects to the order of the original authority which are not relevant for the present proceedings.


3.3 On appeal by the parties, the Commissioner (Appeals) upheld the confiscation of the goods. However, he held that M/s Radha Enterprises has not placed any evidence to show licit receipt of the goods from M/s Amar Food Products. Accordingly, he came to the conclusion that M/s Radha Enterprises was basically created to manage surreptitious removals of M/s Amar Food Products. He also held that in respect of goods seized from the trucks and provisional released to M/s Radha Enterprises, the owner is M/s Amar Food Products and therefore, by implication, fine is payable by them. He upheld the demand of Rs.3,27,159/- and penalty imposed on M/s Amar Food Products. As regards the penalty on M/s Radha Enterprise, he upheld the penalty of Rs.1,10,000/-.


4. Learned Advocate appearing for the appellants made the following submissions:-


a) The goods were found transported with the invoices of M/s Radha Enterprises; the goods were provisionally released to M/s Radha Enterprises on execution of a bond with security by them; however, no show cause notice was issued to M/s Radha Enterprises proposing confiscation of the goods seized from the trucks and the show cause notice was limited to imposition of penalty. The order of the original authority proceeded on the basis of show cause notice and ordered confiscation of the goods and appropriated the fine imposed from the security given by M/s Radha Enterprises.


b) In the light of the above, the finding of the Commissioner (Appeals) that M/s Radha Enterprises is not the owner of the goods and only M/s Amar Food Products is the owner of the goods is beyond the show cause notice.


c) Right through investigation and thereafter M/s Radha Enterprises claimed ownership of the goods and therefore, the Commissioner (Appeals) cannot make out a new case treating M/s Amar Food Products as the owner. Even if the goods were treated as manufactured by Amar Food Products and held to have been cleared clandestinely by M/s Amar Food Products, a presumption of no sale to M/s Radha Enterprises and therefore, M/s Radha Enterprises was not owner is not warranted.


d) However, he submits that he is not disputing the duty liability confirmed against M/s Amar Food Products as the appellant lost the relevant documents due to passage of time.


e) He seeks setting aside the fine sought to be imposed in lieu of confiscation on M/s Amar Food Products.


f) He also submits that penalty of Rs.5 laksh on M/s Amar Food products is excessive and is even more than the duty demand of Rs.3,27,159/-.


g) He seeks setting aside the penalty on M/s Radha Enterprises as they are only buyers of the goods from M/s Amar Food Products.


5. Learned SDR reiterates the finding and reasoning of the Commissioner (Appeals). He particularly draws my attention to the finding that M/s Radha Enterprises was created to route the unaccounted clearances of M/s Amar Food Products. Therefore, he seeks upholding the order of the Commissioner (Appeals).


6. I have carefully considered the submissions from both sides. The evidence on record especially the statements of drivers of the trucks which carried the goods on different dates clearly point to removal of goods from M/s Amar Food Products without preparing excise invoices and without payment of duty. Therefore, the confiscation of the goods is warranted. However, such confiscation has to be adjudged by following the provisions of law as contained in Section 124 of the Customs Act made available to Central Excise matters. It is not disputed that no show cause notice has been issued to M/s Radha Enterprises proposing confiscation of the goods seized from the three trucks as the show cause notice only proposed penalty on M/s Radha Enterprises. The Commissioner (Appeals) held that at the time of provisional release, the investigations were not completed and therefore, based on the invoices the goods should have been released to Radha Enterprises and therefore, that cannot be conclusive proof to show that Radha Enterprises are owners. This reasoning is not acceptable. The fact remains that show cause notice has been issued on 7.4.98 much after the date of provisional release of the goods that is 28.9.97. If the investigation proved that Radha Enterprises are not owner of the goods, such allegation should have been brought out in the show cause notice specially when the goods have been released to M/s Radha Enterprises under bond executed by M/s Radha Enterprises. Therefore, the confiscation adjudged without issue of show cause notice to M/s Radha Enterprises cannot be upheld. Once the confiscation is not upheld, fine in lieu of confiscation of Rs.6 lakhs requires to be set aside and accordingly, the same is set aside.


7. A penalty was imposed by the original authority to the extent of Rs.5 lakhs on M/s Amar Food Products when the goods in the trucks and the goods seized from the factory were confiscated but the Commissioner (Appeals) has set aside the confiscation of goods seized from the factory. However, there was no reduction in the quantum of penalty ordered by him. The submission that the penalty imposed is more than even the duty amount confirmed that is Rs.3,27,159/- is also relevant. Considering the above submissions, and in the given facts and circumstances of the case, the penalty imposed on M/s Amar Food Products under Rule 173Q is reduced from Rs.5 lakhs (rupees five lakhs) to Rs.3,27,159/- (rupees three lakhs twenty seven thousand one hundred fifty nine only).


8. The role of M/s Radha Enterprises in abetting the

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unaccounted clearances by M/s Amar Food Products is evident from the seizure of the goods from the trucks on three different dates coming from M/s Amar Foods Products with the invoices of M/s Radha Enterprises as clearly admitted by the drivers. Therefore, the penalty on them is justified. Penalty of Rs.1,10,000/- imposed is not considered to be excessive. Therefore, the same is upheld. 9. In view of the above, a) Appeal No.E/289/05 in so far as penalty on M/s Radha Enterprises is concerned, is rejected. b) Appeal by M/s Amar Food products is disposed of by upholding the demand of duty Rs.3,27,159/- as uncontested and setting aside the fine in lieu of confiscation and reducing the penalty from Rs.5 lakhs to Rs.3,27,159/-. 10. The appeals are disposed of as above with consequential relief as per law.
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