Custom, Excise & Service Tax Tribunal
Manik Lal Maheswari vs Kolkata South on 27 February, 2026
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
KOLKATA
REGIONAL BENCH - COURT NO.1
Excise Appeal No.75606 of 2018
(Arising out of Order-in-Appeal No.77-79/Kol.V/2017 dated 15.09.2017 passed by
Commissioner (Appeals) of CGST & Central Excise, Kolkata)
M/s KKalpana Industries (India) Ltd.
(Bhasa 14, Bishnupur, Diamond Harbour Road, Dist.-24 Parganas (South), West
Bengal, Pin 743503)
Appellant
VERSUS
Commissioner of CGST & Central Excise, Kolkata
(180, Shantipally, Rajdanga Main Road, Kolkata-700107)
Respondent
WITH Excise Appeal No.75607 of 2018 (Arising out of Order-in-Appeal No.77-79/Kol.V/2017 dated 15.09.2017 passed by Commissioner (Appeals) of CGST & Central Excise, Kolkata) Shri Manik Lal Maheshwari, Executive & Authorised Signatory of M/s KKalpana Industries (India) Ltd.
(Bhasa 14, Bishnupur, Diamond Harbour Road, Dist.-24 Parganas (South), West Bengal, Pin 743503) Appellant VERSUS Commissioner of CGST & Central Excise, Kolkata (180, Shantipally, Rajdanga Main Road, Kolkata-700107) Respondent AND Excise Appeal No.75608 of 2018 (Arising out of Order-in-Appeal No.77-79/Kol.V/2017 dated 15.09.2017 passed by Commissioner (Appeals) of CGST & Central Excise, Kolkata) Shri Narendra Kumar Surana, Director/Managing Director of M/s KKalpana Industries (India) Ltd.
(Bhasa 14, Bishnupur, Diamond Harbour Road, Dist.-24 Parganas (South), West Bengal, Pin 743503) Appellant VERSUS Commissioner of CGST & Central Excise, Kolkata (180, Shantipally, Rajdanga Main Road, Kolkata-700107) Respondent 2 Excise Appeal No.75606,75607,75608 of 2018 APPERANCE :
Mr.Shovendu Banerjee, Advocate for the Appellant Mr.S.K.Dikshit, Authorized Representative for the Respondent CORAM:
HON'BLE MR.ASHOK JINDAL, MEMBER (JUDICIAL) HON'BLE MR.K.ANPAZHAKAN, MEMBER (TECHNICAL) FINAL ORDER NO.75308-75310/2026 DATE OF HEARING : 25 FEBRUARY 2026 DATE OF PRONOUNCEMENT : 27 FEBRUARY 2026 Per Ashok Jindal :
The appellants are in appeal against the impugned order confirming demand along with interest and an equivalent amount of penalty was also imposed on the appellants.
2. The facts of the case are that the Appellant is engaged in the manufacture of PE Compounds, Master Batch Compounds, PVC Compounds, PVC Soles, Chappals, etc., classifiable under Chapter 39 of the Central Excise Tariff. Originally, the manufacturing activity was carried out in the name of M/s Kalpana Plastics Pvt. Ltd. (KPPL), which functioned partly as a 100% EOU and partly as a DTA unit. Subsequently, the 100% EOU was shifted to Joka and the DTA unit was closed.
2.1 KPPL amalgamated with the appellant pursuant to an order of the Hon'ble High Court in Company Petition No.397 of 2005. Upon amalgamation, it was decided to centralize activities at the appellant's premises.
2.2 Accordingly, 620 MT of LLDPE / Reclaimed LLDPE granules were transferred from KPPL to the appellant under 62 Central Excise invoices 3 Excise Appeal No.75606,75607,75608 of 2018 (10 MT per invoice). The clearances were effected under proper invoices and some of the invoices were duly countersigned by the Central Excise Officer. Due to a bona fide belief that amalgamation resulted in continuation of the same legal entity and no physical parting with goods, excise duty was not paid at the time of transfer. 2.3 On 25.04.2007, DGCEI conducted search and investigation. During investigation, the appellant voluntarily deposited Rs.80,00,000/- in five instalments between May-August 2007. 2.4 Thereafter, Show-cause notice dated 20.05.2009 was issued to the appellant demanding Rs.49,78,906/- along with interest and imposing equivalent amount of penalty.
2.5 In the show-cause notice, it is alleged that KPPL cleared 620 MT of raw materials procured duty-free under CT-3 Certificates without payment of duty and invoked proviso to Section 11A alleging suppression of facts. The main allegation in the show-cause notice was that such transfer from KPPL to the appellant of 620 MT of LLDPE/ Reclaimed LLDPE granules, amounted to clearance attracting duty under Notification No.22/2003-CE dated 31.03.2003 and Central Excise Rules. 2.6 A detailed reply dated 31.07.2009 was submitted by the appellant stating that the said transfer was under proper invoices and the Excise Officer countersigned the invoices, no clandestine removal was involved and all records were maintained properly, therefore, there was no question of suppression of facts.
4
Excise Appeal No.75606,75607,75608 of 2018 2.7 The matter was adjudicated. The demand of Excise duty was confirmed along with interest and imposed an equal amount of penalty. 2.8 Being aggrieved with the said order, the appellants filed these appeals before the ld.Commissioner (Appeals), who upheld the adjudication order.
2.9 Being aggrieved with the said order, the appellants are before us.
3. The ld.Counsel appearing on behalf of the appellant submits that as the issue of invoices without payment of Central Excise duty was in the knowledge of the Department and some of the invoices were countersigned by the Central Excise Officer, therefore, suppression cannot be alleged. Consequently, whole of the demand is barred by limitation.
3.1 He further submits that it is a revenue neutral situation as the appellant's firm is under the process of merger and the said firm have merged with M/s Kalpana Industries (India) Ltd. on 25.09.2005. Therefore, whatever duty was payable by the appellants, the same is entitled to take cenvat credit. In view of this, it is a situation of revenue neutrality.
4. On the other hand, the ld.A.R. for the Revenue opposes the contention as made by the ld.Counsel for the appellants as the appellants being a merged unit, are two different units, therefore, the revenue neutrality is not applicable to the facts and circumstances of the case. He submits that the invoice issued in the month of March was duly countersigned by the Range Superintendent and rest of the invoices are not countersigned by the Range Superintendent. In that circumstances, it is a suppression of facts.
5. Heard both the parties and considered the submissions.
6. We find that in this case, the appellants' unit was under the process of merger with M/s Kalpana Industries (India) Ltd. and during the process of merger, the appellants cleared the goods with the 5 Excise Appeal No.75606,75607,75608 of 2018 merged unit. Initially, the invoice issued by the appellants was duly signed by the Range Superintendent. For better appreciation of facts, one such invoice is extracted herein below : 6
Excise Appeal No.75606,75607,75608 of 2018
7. The issue of invoice without payment of duty was well within the knowledge of the Revenue in March, 2007 itself. In that circumstances, the extended period of limitation is not invokable to the facts and circumstances of the case as the show-cause notice has been issued on 20.05.2009 by invoking extended period of limitation for the period May, 2007 to August, 2007.
8. In view of this, we set aside the impugned order on limitation only. Therefore, the impugned demands are not sustainable against the appellant. Consequently, no penalty is imposable on the appellants.
9. In view of the above, we allow the appeals.
(Pronounced in the open court on 27.02.2026) (Ashok Jindal) Member (Judicial) (K.Anpazhakan) mm Member (Technical)