Custom, Excise & Service Tax Tribunal
Parle Products Pvt. Ltd vs Commissioner Of Central Excise, ... on 22 April, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No. I APPEAL No. E/2262/05-Mum (Arising out of Order-in-Original No. 08/2005 dated 31.3.2005 passed by Commissioner of Central Excise, Mumbai-IV) For approval and signature: Honble Mr. P.K. Jain, Member (Technical) and Honble Mr. Ramesh Nair, Member (Judicial) ======================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should 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 : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
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Parle Products Pvt. Ltd. Appellant
Vs.
Commissioner of Central Excise, Mumbai-IV Respondent
Appearance:
Shri T.C. Nair, Advocate, for appellant
Shri V.K. Agrawal, Additional Commissioner (AR), for respondent
CORAM:
Honble Mr. P.K. Jain, Member (Technical)
Honble Mr. Ramesh Nair, Member (Judicial)
Date of Hearing: 22.4.2015
Date of Decision: 22.4.2015
ORDER NO
Per: P.K. Jain
Brief facts of the case are that the appellant is manufacturer of biscuits, confectionary and other items. They are manufacturing the biscuits in their own units and also getting the same manufactured from other persons termed as contract manufacturers. When such biscuits are being manufactured, the appellant supplies them as Parle mix of different flavours and various types of printed wax papers and wrappers. These two items are manufactured by the appellant and supplied to the contract manufacturers for use in the manufacture of biscuits on their behalf. The contract manufacturers pay duty on the biscuits manufactured by them. The appellant is paying duty on the above mentioned two items, i.e. Parle mix of different flavours and various types of printed wax papers and wrappers while clearing to their contracted manufacturing units. They are paying duty on the said two items on cost construction method. During the course of audit, on examination of Chartered Account certificate showing the cost of Parle mix of different flavours and various types of packaging materials manufactured by them, it was noticed that while calculating the cost of these items, certain indirect cost elements viz. overhead cost and profit margin were not included in the value of the said products. Accordingly two show cause notices were issued to the appellant, one covering the period April 1999 to March 2003 and the other covering the period April 2003 to March 2004. The case was adjudicating by the Commissioner vide the impugned order in which the Commissioner held as under:-
ORDER
1) I confirm the demand of Rs.24,23,689/- in respect of Show Cause Notice No.V-Adj(Misc)30-45/04 dt.29.04.04.
2) I also confirm the demand of Rs.8,95,382/- in respect, of Show Cause Notice No.V-Adj(Misc)30-77/04 dt.06.0S.04. The assessee has already paid Rs.8,95,382/- in their Cenvat Account on 09.11.04, 25.02.04 and 10.03 04 I order that the said payment of Us.8,95,382/- stands appropriated towards the confirmed demand.
3) I impose penalty of Rs.24,23,689/- under the provisions of Section MAC of Central Excise Act, 1944, read with Rule 1730 of Contra] Excise Rules, l944, and Rule 25 of Central Excise Rules, 2001/2002, in respect of Show Cause Notice No.V-Adj(Misc)30-45/04 dt.29.04.04.
4) I also impose penalty of Rs.8,95,352/- under the provisions of Section 1 1AC of Central Excise Act, 1944, and Rule 25 of Central Excise Rules, 2001/2002, in respect of Show Cause Notice No.V-Adj(Misc)30-77/04 dt 06.08.04
5) The interest under Section 11AB of Central Excise Act, I#M4, is payable by the assessee on the duty confirmed at Sr.No. 1 above.
6) The assessee should pay the duty, penalty and interest forthwith.
2. The learned counsel for the appellants main contention was that the said order has been passed based upon the report of the Assistant Director (Cost), dated 23.2.2005 and 14.3.2005. It was submitted that the copies of the two reports were not supplied to them and the order has been passed without getting their comments. Hence there has been a case of breach of principles of natural justice. The learned counsel also submitted that they have no objection in following the CAS-4 system even for the earlier period. However, the assessable value arrived as per CAS-4 system by the AD (Cost) should be supplied to them so that they can examine the same and rebut the same. The learned counsel also submitted that in both the show cause notices, extended period of limitation has been invoked. It was submitted that they have been filing the price declarations as required under the law and since they have been filing the price declarations, it cannot be alleged that there was suppression of facts so as to invoke extended period. Moreover, any extra duty liability could have been taken as cenvat credit by the contract manufacturer and, therefore, there cannot be any intention to evade payment of duty and on this ground also, extended period of limitation is not invokable.
3. The learned Additional Commissioner (AR) reiterates the finding in the impugned order and submits that extended period of limitation has been correctly invoked as in the price declaration they have not indicated what is being included and even the CA certificate which was certified along with the price declarations did not clarify the position.
4. We have considered the rival submissions. We note that in the present case the personal hearing was granted to the appellant on 28.12.2004 and the Commissioner has relied upon the reports of the AD (Cost), which are dated 23.2.2005 and 14.3.2005 and the order is passed on 31.3.2005. Under the circumstances, we find force in the contention of the counsel for the appellant that there has been serious breach of principles of natural justice inasmuch as the order has been passed without supplying the copy of the above mentioned reports. In view of the above position, we set aside the impugned order and allow the appeal by way of remand. The Commissioner will provide copies of all the reports of the Assistant Director (Cost) to the appellant and thereafter grant them an opportunity of hearing. The matter will be decided thereafter. We are not going into the question of limitation at this stage, which is kept open and the appellant can agitate the same before the Commissioner.
5. The appeal is allowed by way of remand.
(Pronounced in Court) (Ramesh Nair) Member (Judicial) (P.K. Jain) Member (Technical) tvu 1 5