Custom, Excise & Service Tax Tribunal
M/S. Dd Industries Ltd. & Others vs Cce, Delhi on 21 October, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
BENCH-DB
Date of Hearing/Decision: 21.10.2014
For Approval & Signature :
Honble Mr. Justice G. Raghuram, President
Honble Mr. R.K. Singh, Member (Technical)
1.
Whether Press Reporter 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?
E/Stay/50083/2014 and
E/50072/2014-EX[DB]
[Arising out of Order-in-Appeal No. 141-143/CE/DLH/2014 dated 19.03.2013 passed by the Commissioner (Appeals), Central Excise, Delhi-I]
M/s. DD Industries Ltd. & Others Appellant
Vs.
CCE, Delhi Respondent
Present for the Appellant :Ms. Seema Jain, Advocate Present for the Respondent :Shri Yashpal Sharma, DR E/Stay/50279-50281/2014 and E/50227-50229/2014-EX[DB]
[Arising out of Order-in-Appeal No. 141-143/CE/DLH/2014 dated 19.03.2013 passed by the Commissioner (Appeals), Central Excise, Delhi-I]
CCE, Delhi-I Appellant
Vs.
M/s. DD Industries Ltd.
Sanjay Ghambhir
Rajiv Gambhir Respondent
Present for the Appellant : Shri Yashpal Sharma, DR
Present for the Respondent : Ms. Seema Jain, Advocate
FINAL ORDER NO. 54215-54218/2014
PER: R.K. Singh
Stay applications alongwith appeals have been filed against Orders-in-Appeal No. 141-143/CE/DLH/2014 dated 19.09.2013 which up held the Orders-in-Original No. Division-II/ADJ/04-07 dated 2009, to the extent they confirmed the duty amount of Rs. 14,81,071/- alongwith interest but set aside the penalty on the assessee as well as on Mr. Sanjay Gambhir Managing Director of M/s. DD Industries Ltd. and Mr. Rajiv Gambhir Partner of M/s. DD Sales Corporation.
2. The issue involved is valuation of goods manufactured by the appellants which were sold to M/s. DD Sales Corporation. The impugned order held that such sales were to the related person and therefore the valuation has to be done as per the sale price of M/s. DD Sales Corporation. In fact in respect of an earlier Show Cause Notice covering the earlier period the same issue travelled up to CESTAT which vide its final order No. 856-858/2009-EX[DB] dated 30.10.2009 held as under:
9(a) The appellant company and the partnership firm M/s. DD Sales Corporation are related persons and the sale prices of DD Sales Corporation is to be taken for the purpose of assessment and differential duty and interest on this ground is sustainable within normal period of limitation. However, the Commissioner while determining the differential duty due, shall consider the claim for abatement of cash discount, turnover discount and issue a speaking order after granting reasonable opportunity of hearing to the appellants.
(b) The penalties on the appellant company and the Directors are set aside.
3. The present appeal has been filed on the following grounds.
(i) The appellants and M/s. DD Sales Corporation are not related persons.
(ii) The original adjudicating authority as well as the appellate authority have not given the benefit of turnover discount and cash discount which is admissible to them because these discounts are part of the discount policy of M/s. DD Sales Corporation and is known to the buyers. The appellants have stated that the said discounts have not been allowed on the ground that they are not shown in the invoices of M/s. DD Sales corporation. The appellants have argued that such discounts cannot be shown in the invoices because they are not known at the time of selling of the goods; they are known only later and that the observation of Commissioner (Appeals) and the original adjudicating authority that they had not produced any evidence to establish that the said discounts were passed on to the ultimate buyers is not correct because they had submitted all the necessary documents to the adjudicating authority
(iii) They were also not given the benefit cum duty price although such benefit was given to them by the Commissioner in his order dated 31.01.2006 in respect of the Show Cause Notice dated 02.09.2005 and that the adjudicating authority has not even dealt with this issue in the adjudication orders.
3. We have considered the matter. It is a fact that turnover discounts and cash discounts can not always be shown in the invoice as these discounts are worked out on the basis of the turnover or on the basis of the promptness of payment. Therefore their non-mention in the invoice can not be a criterion for disallowing the same. The appellants have contended that they had given all the evidence relating to the turnover discount and cash discount and same has not been properly taken into account at the time of deciding the issue. Further it is seen that the benefit of cum duty price has not been extended to the appellants while it was duly extended by the Commissioner in respect of similar proceedings relating to another period. We find that this issue has not even been dealt with by the lower adjudicating authorities.
4. Revenue is in appeal against the dropping of penalty against the assessee and S/Shri Sanjay Gambhir and Rajiv Gambhir on the ground that the assessee were clearly guilty of suppression of facts, did not assess goods as per Valuation Rules to evade duty and Mr. Sanjay Gambhir and Mr. Rajiv Gambjir willfully concerned themselves in the acts of commission/omission of the assessee.
5. we find that the issue is purely of valuation. It is not that the assessee cleared goods clandestinely. The assessee have contended that they had a bonafide belief that they and M/s. DD Sales Corporation were not related. There is nothing in the Show Cause Notice which brings out wilfull misstatement/suppression. Instead of indulging in as idle parade of familiar authority in this regard, suffice to say that CESTAT itself in the inter partes proceedings for a different period on identical issue vide order dated 30.10.2009(supra) set aside similar penalties and we have no reason to hold differently.
6. In view of the foregoing we dismiss Revenues appeals. As regards the assessees appeal, we are of the view that the issue needs to be remanded to the original adjudicating authority. Accordingly we waive the requirement of pre-deposit, set aside the impugned order and remand the case for denovo adjudication to the original adjudicating authority with the following direction:
(i) The documentary evidence produced by the appellants with regard to the turnover discounts and cash discounts should be considered afresh with a view to deciding the admissibility thereof. Non-mention of these discounts in the invoices should not be a factor for deciding this issue.
(ii) The appellants claim for cum-duty benefit should also be considered in the light of the fact that similar benefit had been extended to them by the Commissioner vide order dated 31.01.2006.
(iii) The adjudicating authority shall give the appellants an opportunity of being heard before the denovo adjudication.
(Justice G. Raghuram) President (R.K. SINGH) TECHNICAL MEMBE Neha 5