S.H. Kapadia JUDGMENT
S.H. Kapadia, J.
1. Whether, in the facts and circumstances of the case, the tribunal was justified in holding that the 'additive mixture' processed by the three appellants herein was excisable and classifiable under chapter sub-heading 2404.49 of Central Excise Tariff Act, 1985 and that the department was right in invoking the extended period of limitation under the proviso to Section 11A(1) of Central Excise Act, 1944 (hereinafter referred to as "the Act").
2. Briefly, the facts of the case are that M/s Hari Chand Shri Gopal, M/s Gopal Industries and M/s Gopal Zarda Udyog were the three assessees engaged in the manufacture of Chewing Tobacco (Final Product) falling under sub-heading 2404.40 of Tariff Act, 1985. In the manufacture of the final product, they were using an inter-mediate product known as "additive mixture". An intelligence was collected by the officers of the preventive wing of the Commissionerate to the effect that the appellants were manufacturing the said "additive mixture" without obtaining registration certificate under Section 6 of the 1944 Act read with Rule 174 of the Central Excise Rules, 1944; that they have been removing the said goods clandestinely from their factories situated in Delhi; that they were unauthorisedly clearing the said goods under transfer challans to their factories in UP and HP (where the final product was manufactured). On the basis of the aforestated intelligence, various premises belonging to the three appellants were searched. Enquiries were also made from traders dealing in the kimams as well as from the manufacturers and the suppliers of the raw material. The partners of the three appellant firms were also examined.
3. The department was informed that the said "additive mixture" consisted of various ingredients like raw-kimam, menthol, aromatic chemicals, spices, gulab jal, attar and perfumes etc. The process of preparing additive mixture was explained in detail by the partners. On the aforestated investigations, three separate show-cause notices were issued, all dated 25.3.1997. In the said show-cause notices, it was alleged that the appellants were clandestinely manufacturing and clearing additive mixture falling under sub-heading 2404.49 (up to 22.7.1996) and falling under sub-heading 2404.40 on and after 22.7.1996, in contravention of the provisions of the said 1944 Act and the Rules with intention to evade duty/assessment. The show-cause notices further record that on 15.10.1996 M/s Gopal Industries and M/s Hari Chand Shri Gopal voluntarily obtained registration certificates for the manufacture of the said mixture under Rule 174. The three show-cause notices were in respect of the period 18.3.1994 to 26.9.1996 under the proviso to Section 11A(1) of the 1944 Act. In the case ........