Nutritional supplements consisting primarily of carbohydrates and proteins with minor vitamins are classifiable as 'food mixes' under CTH 21069099. Operating a manufacturing unit without registration or filing excise returns justifies the invocation of the extended period of limitation for duty recovery.

M/s. Nutema Life Care Pvt. Ltd, Surat (Appellant 1) are a manufacturing unit of Vintech group. They manufacture various Health/ nutritional supplements namely Protein Powder, Weight loss powder, Energy drink “Vinergy”, etc. and clear the same through retail outlets of M/s. Vintech Shoppe Pvt ltd.

1.1 The officers of Central Excise searched the factory premises of the appellant on 16.07.2015 and took stock of raw materials and finished goods available in the factory premises. During investigation, the officers recorded statements of their directors namely Shri Bipinbhai Laljibhai Kaswala, on 16.07.2015, 21.07.2015 & 13.08.2015 and of Shri Jigneshbhai Ghanshyambhai Panseriya on 08.09.2015. After conducting investigation, show cause notice dated 10.12.2015 was issued proposing recovery of central excise duty of Rs. 1,24,79,150/- under Section 11A(4) of the Central Excise Act, 1944 by invoking extended period of limitation alongwith interest under Section 11AA and imposition of penalty under Section 11AC of the said act. A separate penalty was also proposed against both the Directors under Rule 26 of the Central Excise Rules, 2002.

1.2 In adjudication, the Commissioner vide impugned order dated 18.07.2016 dropped the demand of Rs. 12,03,860/- and confirmed Central Excise duty of Rs. 1,12,75,290/- upon the appellant along with interest and equal penalty under Section 11AC . He also imposed penalty of Rs. 5 Lakhs each on both the Directors under Rule 26. Aggrieved with this order, M/s Nutema and both the Directors filed appeal before this Tribunal.

2. In their appeal, the appellants took the following grounds:

(i) Shri Jigneshbhai G. Panseriya retracted his statements dated 05/09/2015 by filing an affidavit dated 12.09.2015 claiming the said statement to have been recorded under force and threat and was thus, involuntary. Such statement is not a valid evidence as held by Hon’ble Supreme Court in the case of M/s Telestar Travels Pvt Ltd & Ors. Vs. Special Director of Enforcement reported at 2013 (2) TMI 396 (SC) and of Commissioner of C. EX., Mumbai Vs. M/s Kalvert Foods India Pvt Ltd & ors. reported at 2011 (8) TMI 24 (SC).

(ii) In the case of Vinod Solanki Vs. Union of India and Others reported at 2009 (233) E.L.T. 157 (S.C.), it has been observed that “It is trite law that evidence brought on record by way of confession, which stood retracted, must be substantially corroborated by other independent and cogent evidence, which would lend adequate assurance to the court that it may seek to rely thereupon".

(iii) They have been regularly paying VAT and filing annual returns with both Income Tax department as well as Gujarat VAT. They had bona fide belief that goods manufactured by them are subject to transaction value assessment and since, their clearances are below Rs. 1.5Cr they are eligible to SSI benefit. They have not taken any credit of central excise duty paid on inputs and capital goods or of service tax paid on input services.

(iv) Due to absence of element of mens rea in their case, invocation of extended period is not justified. They rely on the decision of Hon’ble Supreme Court in the case of M/S. Uniworth Textiles Ltd. Versus Commissioner of Central Excise, Raipur , reported at 2013 (1) TMI 616- Supreme Court & in the case of Cosmic Dye Chemical Versus Collector of Central Excise, Bombay , 1994 (9) TMI 86-SC.

(v) Duty liability has been erroneously calculated against them as they are entitled to the benefit of Notification No. 01/2011-CE dated 01.03.2011 as ame