Custom, Excise & Service Tax Tribunal
P.B.Vyas vs Cce Mumbai - Iii on 4 September, 2019
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
MUMBAI
WEST ZONAL BENCH - COURT NO. 3
EXCISE APPEAL NO: 1583 of 2011
[Arising out of Order-in-Original No: 14/ANS/11--12 dated 29th July 2011 passed
by the Commissioner of Central Excise, Mumbai - III.]
Supermax Personal Care P Ltd ... Appellant
LBS Marg, Wagle Industrial Estate, Thane - 400 604
versus
Commissioner of Central Excise ...Respondent
Mumbai - III, Vardaan Trade Centre, 4th floor, Road No. 16, MIDC, Wagle Industrial Estate, Thane - 400 604 WITH EXCISE APPEAL NO: 1584 of 2011 [Arising out of Order-in-Original No: 14/ANS/11--12 dated 29th July 2011 passed by the Commissioner of Central Excise, Mumbai - III.] VB Poojari, Manager (Excise) ... Appellant Supermax Personal Care P Ltd LBS Marg, Wagle Industrial Estate, Thane - 400 604 versus Commissioner of Central Excise ...Respondent Mumbai - III, Vardaan Trade Centre, 4 floor, th Road No. 16, MIDC, Wagle Industrial Estate, Thane - 400 604 AND EXCISE APPEAL NO: 1585 of 2011 [Arising out of Order-in-Original No: 14/ANS/11--12 dated 29th July 2011 passed by the Commissioner of Central Excise, Mumbai - III.] E/1583 - 1585/2011 2 PB Vyas, Director ... Appellant Supermax Personal Care P Ltd LBS Marg, Wagle Industrial Estate, Thane - 400 604 versus Commissioner of Central Excise ...Respondent Mumbai - III, Vardaan Trade Centre, 4th floor, Road No. 16, MIDC, Wagle Industrial Estate, Thane - 400 604 APPEARANCE:
Shri Prakash Shah with Shri Mihir Mehta, Advocates for the appellant Shri RK Dwivedi, Additional Commissioner (AR) for the respondent CORAM:
HON'BLE MR C J MATHEW, MEMBER (TECHNICAL) HON'BLE DR SUVENDU KUMAR PATI, MEMBER (JUDICIAL) FINAL ORDER NO: A/86550-86552/2019 DATE OF HEARING: 13/05/2019 DATE OF DECISION: 04/09/2019 PER: C J MATHEW The issue in this appeal of M/s Supermax Personal Care P Ltd (formerly known as M/s Vidyut Metallics Pvt Ltd), against order-in- original no. 14/ANS/11--12 dated 29th July 2011 of Commissioner of Central Excise, Mumbai - III, pertains to the clearance of 'safety razor blades' and 'parts and components for shaving systems' to job-
E/1583 - 1585/2011 3 worker in Himachal Pradesh and Hyderabad as well as to their own unit at Kalyan for further processing which was essentially that of packing. The value of goods was arrived at on the basis of 'cost construction' that relied upon the balance sheet for the previous year in the absence of actual cost of clearance ascertained for the year of manufacture with the differential duty, if any, being paid on finalization of the balance sheet of the year. Proceedings were initiated on the ground that these clearances had been effected without payment of proper duty.
2. According to Learned Counsel, duty liability to be discharged as per rule 8 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 i.e. 'Where the excisable goods are not sold by the assessee but are used for consumption by him or on his behalf in the production or manufacture of other articles, the value shall be one hundred and ten per cent of the cost of production or manufacture of such goods.' was computed on the basis of costs (unaudited balance sheet) with differential duty, if any, made good when the final accounts (as audited) are available. It was further contended that during the disputed period of 2004-05 to 2007-08, cost of production as certified by cost accountant, was furnished to Joint Director (Cost), Central Excise Commissionerate, Mumbai - III on 11th September 2006 for E/1583 - 1585/2011 4 the first two years and, thereafter, on 3 rd March 2008 and 1st April 2009 for the other two years. Tracing the developments, he informs that three show cause notices for demand of ₹ 1,13,37,413 (April -
June 2006), ₹ 1,15,70,647 (July - October 2006) and ₹ 1,23,11,546 (November 2006 - March 2007) had been issued. The demand for the period, according to him, was confined to the extent of ₹ 28,52,119 which, having been deposited, was appropriated in the adjudication order of 31st March 2008.
3. According Learned Counsel, notices for demand of ₹ 2,35,31,560 and ₹ 1,09,89,886 for April - November 2007 and December 2007 to March 2008 was issued in December 2008 and that further investigations were taken up during the pendency of these notices. That the revision of costs by the Joint Director (Costs) for this period was not acceptable to the appellant except in relation to clearance to 'job-worker' was clarified by Learned Counsel. He submits that the demand for the period was confirmed in order dated 12th February 2010 to the extent of ₹ 71,01,385 which had been duly discharged.
4. According to him the present proceedings commenced with notice dated 23rd March 2010, which sought differential duty of ₹ 2,95,45,203 for 2004-05 to 2007-08 and other detriments culminated with confiscation thereon in the impugned order leading to this E/1583 - 1585/2011 5 appeal.
5. The first challenge to the show cause notice leading to the impugned order is its legality in the face of earlier orders that confirmed differential duty and appropriated the amounts discharged.
It is also submitted that the appellant had discharged duty in accordance with revised computation of the Joint Director (Costs) which had not been considered by the adjudicating authority and that the costs had been wrongly inflated to sustain the demand. Reliance has been placed on the decision of the Hon'ble High Court of Punjab and Haryana in Dee Kay Exports v. Union of India [2011 (264) ELT 366 (P&H)] and Paro Food Products v. Commissioner of Central Excise, Hyderabad [2005 (184) ELT 50 (Tri.-Bang.)].
6. We have heard Learned Authorised Representative at length. It is submitted by him that the procedure adopted by the appellant for discharge of liability on clearances was patently incorrect and that the present claims of the appellant remained unverified.
7. On the claim of the appellant that show cause notice covers the same period as those issued earlier on finalization of the cost of production, we take note that in re Dee Kay Exports the Hon'ble High Court of Punjab & Haryana held that '6. Learned counsel for the respondents has not been able to show any provision in the Act under which the issue could be E/1583 - 1585/2011 6 reopened by the same authority by way of second Show Cause Notice. He has not been able to dispute the applicability of judgments relied upon on behalf of the petitioner.' and that, in re Paro Food Products, the Tribunal has held that '5. We have gone through the records of the case carefully. The Assistant Commissioner dropped the proceedings on the ground that the price lists were not provisionally approved, but have become final. There is no indication from the records that the appellants had suppressed any facts. In fact, based only on the balance sheet of the appellants' principal the demand was made. In the second show cause notice issued by the Commissioner, the amount of demand is exactly same for the same period. This demand is also based on the balance sheet of the principal. In other words, after the conclusion of the first proceedings initiated by the Assistant Commissioner, no new development took place. There was no seizure of any new document. All the documents which were available during the first proceedings formed the basis of the second proceedings. In the first proceedings, the Assistant Commissioner has dropped the demand. Against the Assistant Commissioner's order, the Revenue has gone in appeal which is yet to be decided. Under these circumstances, we strongly feel that there is no point in the Commissioner initiating a second proceedings for the same period and for the same amount invoking longer period. There is no suppression of facts. So, longer period is ruled out. In that case, the demand is time barred. We also hold that the principle of res judicata is applicable. The Hon'ble Supreme Court in the case of Devilal Modi v. Sales Tax Officer, Ratlam & Ors. [AIR 1965 Supreme Court 1150 (V 52 C ISI)] has held that in a case where assessment to sales tax for particular year challenged on some grounds by writ petition which was dismissed on E/1583 - 1585/2011 7 merits, subsequent writ petition challenging same assessment order, on additional grounds cannot be entertained as the principle of constructive res judicata is applicable to the writ petition. The Tribunal in the case of Commissioner of Central Excise, Bangalore v. Andhra Steel Corporation Ltd. [2002 (145) E.L.T. 567 (Tri. - Bang.)] held that repeated show cause notice for the same period after the case has been dropped by the Assistant Commissioner is hit by res judicata and no new material has come into the hands of the Revenue. The Tribunal in the case of Commissioner of Central Excise, Indore v. Siddharth Tubes Ltd. [2004 (170) E.L.T. 331 (Tri. - Del.) has held that the issuance of a second show cause notice on the same issue and period after gathering additional information/material cannot be issued when one has already been issued earlier. Similar view has been held in the case of Nestle India Ltd. v. CCE, Chandigarh-II [2004 (176) E.L.T. 314 (T) = 2004 (63) RLT 586 (CESTAT - Del.)]. Another important point should be borne-in-mind by the Revenue. It is possible that show cause notice for demand can be issued on several grounds say A, B, C, etc. When proceedings are initiated, the Revenue should take into account all the grounds. They cannot issue show cause notice on one ground, A. conclude the proceedings and latter cannot issue another show cause notice on another ground, B. for the same period and so on. If this is allowed, then there would not be an end to the number of proceedings against a party. This is definitely against the public policy. In this connection we would like to recall maxim - "Res judicata pro ventate accipitar - A matter adjudged is taken for truth. A matter decided or passed upon by a court of competent jurisdiction is received as evidence of truth". - (Black's law Dictionary)'
8. From the cited decisions, the subjecting of an assessee to E/1583 - 1585/2011 8 repeated proceedings under section 11A is not the intent of law. In view of the repugnancy, we set aside the impugned order and allow the appeals.
(Order pronounced in the open court on 04/09/2019) (C J Mathew) Member (Technical) (Dr. Suvendu Kumar Pati) Member (Judicial) */as140522052208