Custom, Excise & Service Tax Tribunal
M/S Jindal Home Products (P) Ltd vs Cce, Delhi Iv, Faridabad on 1 June, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. Principal Bench, New Delhi COURT NO. III DATE OF HEARING : 01/06/2015. DATE OF DECISION : 01/06/2015. Excise Appeal No. 2642 of 2006 [Arising out of the Order-in-Appeal No. 35/CE/Appl/DLH-IV/2006 dated 09/05/2006 passed by The Commissioner of Central Excise (Appeals), Delhi I, New Delhi.] For Approval and signature : Honble Shri Rakesh Kumar, Member (Technical) Honble Ms. Sulekha Beevi C.S., Member (Judicial) 1. Whether Press Reporters may be allowed to see : the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it would be released under Rule 27 of : the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair : copy of the order? 4. Whether order is to be circulated to the : Department Authorities? M/s Jindal Home Products (P) Ltd. Appellant Versus CCE, Delhi IV, Faridabad Respondent
Appearance Shri S.K. Pahwa, Advocate for the Appellant.
Shri M.S. Negi, Authorized Representative (DR) for the Respondent.
CORAM : Honble Shri Rakesh Kumar, Member (Technical) Honble Ms. Sulekha Beevi C.S., Member (Judicial) Final Order No. _____/2015 Dated : 01/06/2015 Per. Rakesh Kumar :-
The facts leading to filing of this appeal are, in brief, as under.
1.1 The appellant are manufacturers of LPG stoves as well as bio-gas stoves. The bio-gas stoves are fully exempt from duty. The period of dispute in the present case is 09/06/08 to 31/08/2000. The appellant while manufacturing the stoves in their factory, got the packing material with the description of the product etc. printed on it from outside and the stoves are cleared from the factory in packed condition. The LPG stoves were notified under Section 4A of the Central Excise Act, 1944 and accordingly the duty on the stoves cleared by the appellant was required to be paid on the assessable value determined under Section 4A, that is, on the basis of the declared MRP minus abatement specified in the notification issued under Section 4A.
1.2 There are three allegations against the appellant.
(1) The first allegation is that during the period of dispute from 09/06/98 to 31/08/2000, while some MRP was printed on the packages, the appellant put a second MRP by putting a sticker on the MRP cleared earlier and the MRP on the sticker is much less than the MRP printed on the cartage and the appellant were not allowed to do this and were required to pay the duty only on the basis of the assessable value determined on the basis of the higher of the two MRPs, i.e. the MRP originally printed and the MRP mentioned on the sticker which had been put on the original MRP printed on the cartons. The duty demand of Rs. 11,91,164/- is on this basis.
(2) The second allegation against the appellant is that during the above-mentioned period of dispute, they have cleared certain quantity of LPG stoves in the guise of bio-gas stoves to 4 dealers namely Shri Jibu J. Edattakaran, Kerala, G.A. Associate, Bangalore, M/s Shiv Shakti Enterprises, Gujarat and M/s Govind Agencies, Calcutta. The duty demand of Rs. 1,59,304/- is on this basis.
(3) The third allegation against the appellant is that in course of search of their factory, the officers found a blank invoice book of M/s Ankur Enterprises and on inquiry, M/s Ankur Enterprises was found to be non-existent firm. However, from the impressions made on the duplicate copy of invoices, the officers were availed to ascertain the names of the dealers and the quantity of the stoves which had been cleared to them. On this basis, it has been alleged that stoves have been cleared to 4 dealers M/s Leena Gas Service, Kalinga Pali, M/s Syam Enterprises, PO Kollam, Kerala, M/s Betal Trading Co., Garishpur (Modasa) and M/s Syam Enterprises, Thirumullavaram, Kerala without payment of duty. The duty demand of Rs. 28,531/- is on this basis.
1.3 The Additional Commissioner vide order-in-original dated 28/2/05 confirmed the above-mentioned duty demands against the appellant alongwith interest thereon under Section 11AB and beside this, imposed penalty of Rs. 11,91,164/- on the appellant under Section 11AC. This order of the Joint Commissioner was upheld by the Commissioner (Appeals) vide order-in-appeal dated 09/5/06. Against this order of the Commissioner (Appeals), this appeal has been filed.
2. Heard both the sides.
3. Shri S.K. Pahwa, Advocate, Advocate, the learned Counsel for the appellant, pleaded that so far as duty demand of Rs. 11,91,164/- against the appellant is concerned, this demand is based only on the allegation that the cartons of the gas stoves were having much higher MRP printed on them and instead of determining assessable value on that MRP, the appellant have paid duty on the assessable value determined on the basis of much lower MRP which had been declared on the sticker which had been put on the original MRP, that in terms of Rule 6 of the Standards of Weight and Measures (Package) Rule, 1977, the declaration on a package regarding the MRP of the commodities packed can be made by affixing an MRP lable on the package, that it is not the Departments case that on the cartons of the stoves, two MRP had been simultaneously declared, that the appellant had put the MRP on the stoves were being sold in retail, as they did not intend to sell the stoves at the MRP which was originally printed on the cartons, that the Department cannot allege that they had declared two MRP on the cartons and did not determine assessable value on the basis of the higher MRP, that the Tribunal in the case of Hindustan Appliances vs. CCE reported in 2002 (142) E.L.T. 212 (Tri. Del.) has held that affixing the MRP sticker showing MRP under Rule 6 of the fulfils the requirement of declaration in terms of Section 4A of the Central Excise Act, 1944, and in such cases, the MRP indicated on the sticker being in supersession of the MRP printed when the cartons were manufactured is not a case of declaration of two MRPs one originally printed on the carton and the second shown on the stickers, and, hence, the duty demand of Rs. 11,91,164/- under the provision of Section 4A of the Central Excise Act, 1944 on the basis of higher of the two MRP is not sustainable, that same view has been taken by the Tribunal in the case of Sukumar Soft Drinks vs. CCE, Bangalore reported in 2006 (206) E.L.T. 1021 (Tri. Bang.), that the ratio of these judgments of the Tribunal is squarely applicable to the facts of this case, more so, when it is not the case of the Department that the stoves had sold by the appellants dealers on the MRP is much higher than the MRP printed on the sticker, that in view of this, the duty demand of Rs. 1,59,304/- is not sustainable, that as regards duty demand of Rs. 11,91,164/- based on the allegation of clearing bio-gas stoves in the guise of LPG stoves, this duty demand is based on the statements of 4 dealers - Shri Jibu J. Edattakaran, Kerala, G.A. Associate, Bangalore, M/s Shiv Shakti Enterprises, Gujarat and M/s Govind Agencies, Calcutta who in their statements have stated that they deal only in LPG stoves, that on the basis of their statements only, the Department had alleged that the stoves received by them are actually the LPG stoves and not bio-gas stoves as shown in the invoices, that three out of the four dealers have placed orders for bio-gas stoves only, that when three dealers, G.A. Associate, Bangalore, M/s Shiv Shakti Enterprises, Gujarat and M/s Govind Agencies, Calcutta have placed written orders with the appellant for supply of bio-gas stoves, which are on record, and the perusal of the orders shows that the same were specifically for supply of bio-gas stoves and, as such, these persons were dealing in bio-gas stoves, their statements stating that they were not dealing in bio-gas stoves are not reliable, that in the circumstances of the case, the cross examination of these four dealers Shri Jibu J. Edattakaran, Kerala, G.A. Associate, Bangalore, M/s Shiv Shakti Enterprises, Gujarat and M/s Govind Agencies, Calcutta was necessary, but the appellants request for cross-examination was not accepted and, hence, the duty demand based only on the statements of these dealers is not sustainable, that as regards the duty demand of Rs. 28,531/- based on the basis of clandestine removal is concerned, this demand is based on the blank invoice book of M/s Ankur Enterprises, that the Departmental officers, on the basis of the impressions on the duplicate copies, have ascertained the name of the dealers and the quantity of the stoves which may have been sold under the invoices though the original invoices are not available, that except for one dealer M/s Leena Gas Service, no inquiry has been conducted with other three dealers M/s Syam Enterprises, PO Kollam, Kerala, M/s Betal Trading Co., Garishpur (Modasa) and M/s Syam Enterprises, Thirumullavaram, Kerala and that in view of this, the duty demand of Rs. 28,531/- is also not sustainable. It was, therefore, pleaded that the impugned order is not sustainable.
4. Shri M.S. Negi, the learned DR, defended the impugned order by reiterating the findings of the Commissioner.
5. We have considered the submissions from both the sides and perused the records.
6. The bulk of the duty demand Rs. 11,91,164/- is on the basis of the allegation that while on the cartons of the LPG stoves cleared by the appellant from MRP was printed, the appellant had put MRP stickers on the MRP originally printed on the containers, which is much lower than the MRP originally printed on the containers and discharged duty liability on the value determined on the basis of the MRP printed on the stickers. According to the Department, the assessable value should have been determined on the basis of MRP printed on the cartons and not on the basis of the MRP mentioned on the stickers which had been pasted on the MRP originally printed on the cartons. We find that identical issue was involved in the case of Hindustan Appliances vs. CCE (supra). In the case of Hindustan Appliances, the cartons of the package commodity were having some MRP printed on them and the assessee having decided to sell the goods at a lower MRP, had put stickers on the MRP originally printed showing the lower MRP. The Tribunal in this case held that MRP indicated on the sticker being put on the MRP printed on the cartons when the same were manufactured is not a declaration of two MRP one originally printed on the cartons and the other shown on the sticker and hence the duty demand in terms of Explanation II to Section 4 on the basis of higher of the two MRP would not be sustainable. The Tribunal in this order also held that affixing of sticker showing revised MRP over the printed MRP on the packages is in accordance with Rule 6 of the Standards of Weight and Measures (Package) Rule, 1977 and it fulfils the requirement of the declaration in terms of Section 4A of Central Excise Act, 1944. Same view has been taken by the Tribunal in the case of Sukumar Soft Drinks vs. CCE, Bangalore (supra). We are of the view that the ratio of these judgments of the Tribunal is squarely applicable in the facts of this case. Therefore, the impugned order confirming duty demand of Rs. 11,91,164/- is not sustainable and the same has to be set aside.
7. As regards the duty demand of Rs. 1,59,304/- on the basis of allegation that the appellant have cleared LPG stoves in the guise of bio-gas stoves without payment of duty to four dealers namely Shri Jibu J. Edattakaran, Kerala, G.A. Associate, Bangalore, M/s Shiv Shakti Enterprises, Gujarat and M/s Govind Agencies, Calcutta, on perusal of these supply orders, it is seen that the same were the supply of bio-gas stoves and these supply orders indicate that these dealers were also dealing in bio-gas stoves. For this reason, the appellant had sought the cross examination of these dealers which in our view was necessary. The request for cross-examination of the dealers has, therefore, been wrongly denied. Therefore, in our view, this duty demand would not be sustainable and the matter had been remanded to the original Adjudicating Authority after permitting cross examination of the dealers.
8. As regards the duty demand of Rs. 28,531/- the same is based on the impressions made on the blank invoice book of M/s Ankur Enterprises found in the factory premises of the appellant. On the basis of the impressions made as the blank invoice book of M/s Ankur Enterprises, it has been alleged that the appellant have sold stoves without payment of duty to M/s Leena Gas Service, Kalinga Pali, M/s Syam Enterprises, PO Kollam, Kerala, M/s Betal Trading Co., Garishpur (Modasa) and M/s Syam Enterprises, Thirumullavaram, Kerala. However, except for M/s Leena Gas Service who have denied to purchase of any gas stoves and no inquiry has been made with other dealers. In view of this, this duty demand is also not sustainable and has to be set aside.
9. In view of the above discussion, while the duty demand of Rs. 11,91,164/- with interest and equal amount of penalty and also the duty demand of Rs. 28,531/- with interest and penalty is set aside, so far as the matter of duty demand of Rs. 1,59,304/- is concerned, this demand is also set aside and the matter is remanded to the original Adjudicating Authority for denovo adjudication after permitting cross examination of the dealers. The appeal stands disposed of as above.
(Dictated and pronounced in open court.) (Rakesh Kumar) Member (Technical) (Sulekha Beevi C.S.) Member (Judicial) PK ??
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