Custom, Excise & Service Tax Tribunal
M/S. Ishaan Research Lab (P) Ltd vs Cce Delhi Ii on 4 April, 2013
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
COURT NO. I
Date of Hearing/Decision: 04.04.13
E/873/2012- EX [DB]
M/s. Ishaan Research Lab (P) Ltd. Appellants
Vs.
CCE Delhi II Respondent
(Arising out of the O-I-O No.80/2011 dated 27.11.2012 passed by the Commissioner Central Excise, Delhi-II).
Hon'ble Ms. Archana Wadhwa, Member (Judicial) Hon'ble Mr. Rakesh Kumar, Member (Technical)
1. Whether Press Reporters may be allowed to see the :
Order for publication as per Rule 27 of the CESTAT (Procedure) Rule, 1982?
2. Whether it would be released under Rule 27 of :
the CESTAT (procedure) Rule, 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?
Appearance Sh. K.K. Anand, Advocate - for the Appellant Ms. Shweta Bector, DR. - for the Respondent Final Order: 56238/2013 Per Rakesh Kumar The appellant (hereinafter referred to as IRLP) are manufacturer of ayurvedic drugs which had become chargeable to duty in 1994. In all 92 products were being manufactured. On receipt of intelligence about duty evasion by classifying the cosmetic products as ayurvedic medicines and also mis-declaring the assessable value, the Directorate General of Central Excise Intelligence conducted investigation and on the basis of the evidence unearthed during the investigation, it was alleged that certain products manufactured by the appellant were cosmetic products, not ayurvedic medicines and that in respect of some products clearances were being made to related persons M/s. Ishaan Marketing (p) Ltd. (IMPL) and M/s. IRL Marketing (p) Ltd. (IRLMPL) who were selling goods at much higher price while duty was being paid on the lower price at which the goods were being sold to M/s. IMPL & M/s. IRLMPL. On this basis, five Show Cause Notice covering the period from 01.04.1991 to 30.06.1997 were issued to the appellant demanding total duty of Rs. 647.12 lakh along with interest and also for imposition of penalty. The Show Cause Notice were adjudicated by the Commissioner by five different orders by which the duty demands, as mentioned above, were confirmed against the appellant and besides this, penalties were imposed on the appellant company as well as on M/s. IMPL & IRLMPL. The appellant filed appeals to the Tribunal which disposed of the same by final order No. 381396/2000/C dtd. 28.08.2000 by which the Tribunal held that 22 products out of 92 products were P & P ayurvedic medicine falling under heading 3003.30 of the Central Excise Tariff chargeable to duty @ 10% advelorum and the remaining products in dispute are cosmetics/ toilet preparation of Chapter 33 of the Central Excise Tariff Act, 1985, attracting duty @ 40% advelorum. The Tribunal also held that M/s IRLP and M/s. IMPL are not related persons and also that extended limitation period is not applicable. The Tribunal directed the re-quantification of the duty demand for normal limitation period and thereby making the Show Cause Notice dt. 10.04.19996 time barred. The penalty on M/s. IMPL and Ms. Vinita Jain, Managing Director, were set aside. However, the question on levy of penalty on IRLP was left open.
2. The Department filed appeal to Honble Supreme Court. Apex Court vide judgment dtd. 08.09.2008 held that 20 out of 92 products were ayurvedic medicines and the remaining were cosmetics and toilet preparation attracting higher duty @ 40% advelorum. With regard to value, the Apex Court gave following directions for re-determination of value and re-quantification of duty:-
i) Wherever IRLP had sold products to the IMPL as also to independent third parties including Hotels, the least price charged to the third party may be taken as the basis for the sales made by IRLP to IMPL for arriving at the assessable value for such products.
ii) wherever the products were never sold by the IRLP to the independent third parties, but only to IMPL, the wholesale price of IMPL charged to their wholesales dealers for such products, may be taken as the basis for arriving at the assessable value.
iii) While arriving at the assessable value, discounts, freight excise duty, sales tax, other taxes and other permissible deductions under section 4 should be allowed in accordance with the law.
3. The matter was adjudicated de-novo for re-quantification on duty and the Commissioner vide order-in-original dtd. 24.02.2010 re-quantified the duty as Rs.2,16,00,779/- in respect of Show Cause Notice dtd. 30.09.96, 31.12.96, 02.05.1997 & 28.10.1997. The remaining duty demand was dropped. Besides this, he also ordered charging interest on duty at the applicable rate. Against the above order of the Commissioner, the appellant filed appeal to Tribunal which was disposed of vide Tribunals order No.118/2011 dtd. 28.01.2011 by which the matter was remanded again to the commissioner for de-novo adjudication after considering Appellants reply to the Show Cause Notice and granting personal hearing. The matter was adjudicated de-novo once again vide order-in-original dtd.27.12.2011 by which the duty demand of Rs.1,17,64,695/- was confirmed in respect of Show Cause Notices dtd. 30.09.1996 & 31.12.1996 and the remaining duty demand was dropped. Against this order of the Commissioner, this appeal has been filed.
4. Heard both the sides.
5. Sh. K.K.Anand, Advocate, ld. counsel for the appellant, pleaded that re-quantification of duty has not been done in terms of the Apex Court order, that the Commissioner in the cases where the sale have been made to IMPL as well as to independent buyers, has rejected invoices pertaining to sale of the goods to independent buyers without any justification and that in view of this, the impugned order is not correct and has to be remanded once again. However Ms. Shweta Bector, ld. Departmental Representative, defended the impugned order and pleaded that appellant did not supply the information regarding the wholesale price of the products which were sold through IMPL, inspite of several reminders being given by the Department and also in the cases where the sales of a particular product had been made to IMPL as well as to independent buyers, the invoices in respect of sales to IMPL and independent buyers were in respect of packings of different weight.
6. We have considered the submissions from both the sides and perused the records. There is no dispute about the fact that Apex Court had given certain directions for re-quantification of duty in para 33 of the judgment. From perusal of the impugned order, it is clear that re-quantification has not been done in terms of this order, while the appellant plead that all the necessary information had been provided. In view of this the impugned order is not sustainable. The same is set aside and the matter is once again remanded to the Commissioner for re-quantification of the duty demand strictly in term of the directions of the Apex Court. The appellant are also directed to extend full co-operation in this regard by furnishing the necessary information if they have not furnished the same earlier.
Archana Wadhwa Member(Judicial)
Rakesh Kumar Member(Technical)
S.Kaur
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