Custom, Excise & Service Tax Tribunal
M/S. Merind Ltd vs Commissioner Of Central Excise, ... on 12 May, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. IV Appeal No. E/462/05-Mum E/CO/200/05 [Arising out of Order-in-Appeal No. AT/M-III/153/2004 dated 05/01/2005 passed by the Commissioner (Appeals), Central Excise, Mumbai] For approval and signature: Honble Mr. Ramesh Nair, Member (Judicial) Honble Mr. Raju, Member (Technical) =======================================================
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?
=======================================================
M/s. Merind Ltd.
:
Appellant
VS
Commissioner of Central Excise, Mumbai-III
:
Respondent
Appearance
Shri M. P. Baxi, Advocate for the Appellant
Shri H. M. Dixit, AC (AR) for the Respondent
CORAM:
Honble Mr. Ramesh Nair, Member (Judicial)
Honble Mr. Raju, Member (Technical)
Date of hearing: 05/01/2016
Date of decision: / /2016
ORDER NO.
Per : Ramesh Nair
The appeal is directed against Order-in-Appeal No. AT/M-III/153/2004 dated 05-01-2005 passed by the Commissioner of Central Excise (Appeals), Mumbai Zone-II, wherein the Ld. Commissioner upholding the Order-in-Original No. 02/MM/2004-05 dated 30-08-2004 rejected the appeal of the appellant.
2. The fact of the case is that the appellant is engaged in the manufacture of P&P medicines falling under Chapter 30 of Central Excise Tariff Act, 1985 and availed 15% discount on Maximum Retail Price in terms of Notification No. 245/83 dated 13-09-1983. They had filed, at relevant period, price list from time to time from August 1991 in respect of their final product. In the price lists, they claimed 15% discount on MRP to arrive at the assessable value under Section 4 of Central Excise and Salt Act, 1944. As per the condition of the Notification, the retail price of the medicines which was claimed for concession should be specified in the DPCO 1979/1987. In the show cause notice, it was alleged that the appellant while claiming the discount of the price list have withheld vital information in as much as they have not submitted the documents showing the medicines has been specified in the DPCO 1987 and not declared at the footnote of the price list that the medicines figured in DPCO. Thus the appellant have not complied with the prescribed condition of the Notification No. 245/83, therefore not eligible for this discount. In the adjudication order, the Addl. Commissioner accepting with the allegations, denied the discount and confirmed the consequential duty demand of Rs.49,81,952/- and also imposed the penalty of equal amount without quoting any statuary provision for penalty. Aggrieved by the said Order-in-Original dated 30-08-2004, the appellant filed an appeal before the Commissioner (Appeals), who rejected the appeal vide the impugned order, hence the appellant is before us.
3. Shri M.P. Baxi, Ld. Counsel for the appellant submits that the appellant have been filing price list in Performa III from time to time and in the price list, they have categorically declared that retail price is fixed under DPCO, 1987 and from such retail price 15% discount was claimed in terms of the Notification No. 245/83. He submits that with this declaration there is no dispute that the maximum retail price declared in the price list is specified under Drug (Price Control) Order, 1987. These price lists were approved by the competent authority of the department and no objection was raised on any issue either on the fact of price specified under DPCO or claim of discount of 15% under Notification No. 245/83 at the time of approval of the price list, therefore entire show cause notice which was issued after the normal period on limitation is time bar. He further submits that Ld. Commissioner has placed reliance on the judgment of Easland Combines vs. Collector of C.Ex., Coimbatore 2003 (152) ELT 39 (S.C.) on the issue of re-opening of the approval of price list. He submits that the said judgment is not applicable when demand is raised for extended period without availability of any ingredient of proviso to Section 11A. He submits that rather the said judgment is supporting the appellant. On query from the bench regarding the price list submitted to the Drug Authority as specified under DPCO 1987. He fairly submits that being very old case, the said documents could not be traced out, hence unable to submit.
4. On the other hand Shri H.M. Dixit, Ld. Asstt. Commissioner (AR) appearing on behalf of the Revenue reiterates the findings of the impugned order. He submits that as per the Notification No. 245/83, discount of 15% can only be allowed if the MRP is specified in the price list referred to in the DPCO 1987. The appellant have not shown at any stage that the maximum retail price declared in the price list submitted to the department is specified in the price list referred to in the DPCO 1987. Therefore, they violated vital condition of the notification. Hence the discount was rightly denied by the lower authority.
5. We have carefully considered the submissions made by both the sides.
6. We find that it is admitted fact that the appellant could not submit price list referred to in the DPCO 1987, however in the price list filed to the department, it was clearly mentioned that the MRP is as per the DPCO 1987, it shows that price declared in the price list is DPCO price. We find that the departmental authority have been approving the price list from time to time, despite knowing that, the appellant have shown DPCO prices in the price list and claimed the discount of 15% in terms of Notification No. 245/83. If at all the authority has any doubt regarding the DPCO price, nothing prevented the department to call for necessary documents before approval of the price list. In the notification, there is no condition that price list with reference DPCO 1987 is required to be submitted. We find that there is no suppression of the fact on the part of the appellant in as much as they have correctly declared all the details required in their price lists. Though the department is empowered to re-open the approval of price list, however the same can be done within one year or as the case may be five years depending on the facts whether there is any suppression of fact on the part of the appellant.
6.1 As per our above discussion, we do not find any suppression of fact, therefore it was only normal period of one year available to the department to re-open the approval of price list which the department failed to do so and therefore entire demand raised for the extended period is time barred. The Ld. Commissioner for invoking the extended period only placed reliance on the judgment of Honble Supreme Court in the case of Easland Combines (supra).
On the careful reading of judgment, we find that what is settled in the said judgment is that department is empowered to re-open the approval of classification list or exemption of price list, but at the same time Honble Apex Court also held that it can be done only within one year if there is no willful misstatement or suppression of fact. We find that in the present case, there is no suppression of fact, therefore the Honble Apex Court judgment is rather supporting the case of the appellant.
6.2 In view of our above discussion, we find that the demand is not sustainable being time barred. The impugned order is set aside and the appeal is allowed.
(Order pronounced in court on ..) Raju Member (Technical) Ramesh Nair Member (Judicial) Saifi Per : Raju Member (Technical) 7.1 After having gone through the order proposed by the learned Brother, I proceed to record a separate order. As already formulated by learned Brother, the only legal issue involved in the present appeal is as to whether extended period of limitation can be invoked in the circumstances of this case. I find that appellant had claimed the benefit of Notification 245/83 dated 13.9.83 in the pricelist filed by them under Central Excise rules by claiming that the prices of their products are covered under DPCO 1987. As recorded by the learned brother in para 3 of his order, the learned counsel of the appellant had claimed that they had categorically declared in the price list filed under Central Excise Law that retail price is fixed under DPCO, 1987 and from such retail price 15% discount was claimed in terms of notification 245/83. The appellants have failed to produce evidence to prove that their prices were approved under DPCO 1987. They have failed not only to produce such evidence not only before the lower authorities but also before the tribunal, claiming that it is old matter. I find that the demand pertains to the period 1991 to 1994 and the notice was issued in 1996. The appellants have not produced the evidence of approval under DPCO in 1996 or anytime thereafter. The reason given by the appellant that the matter is old, does not hold much water. At the time when the notice was issued to the appellant, the matter was fresh, about two to five year old, therefore the claim that they are not able to produce the said Price List as the matter is old is without any basis. While there is no condition that the DPCO price list is to be submitted along with the price list under Central Excise Rules, however it is responsibility of the appellants to make correct claim in the Price List. If they have claimed that the prices are covered by the DPCO 1987 then they should be able to give evidence. The Section 106 of the Evidence Act states as follows
106. Burden of proving fact especially within knowledge When any fact is especially within the knowledge of any person, the burden of proving that fact is upon him.
Illustrations
(a) when a person does an act with some intention other than that which the character and circumstances of the act suggest, the burden of proving that intention is upon him.
(b) A is charged with traveling on a railway without a ticket. The burden of proving that he had a ticket is on him.
It is a situation very akin to the illustration (b) to the Section 106 of the Evidence Act. The appellants only know about the document by which prices in their case were approved under DPCO. Like a person travelling without a ticket is required to prove that he has the ticket on him (Illustration (b) of the Section 106), in this case the appellants are required to prove that their prices were approved under DPCO 1987. In absence of evidence to substantiate the claim that the prices are approved under DPCO, the assertion made on the price list submitted to revenue under Central Excise Law amounts to mis-declaration with intent to fraudulently avail the exemption. The only conclusion that can be derived from these facts is that they had made a wrong and fraudulent claim at the time of approval of Price List under Central Excise Law. Approval of price list by Central Excise authorities is subject to the truthfulness of the declaration contained therein. In the era of self removal procedure, the revenue places great reliance on the declarations made in the documents. The declarations are taken at face value. In the instant case, the appellants had in their price list under Central Excise Law, had claimed that the price of their products are covered by DPCO 1987. Hon Supreme Court in the case of AAFLOAT TEXTILES (I) P. LTD. (2009 (235) E.L.T. 587 (S.C.)) observed as follows
17.?In Lazarus Estate Ltd. v. Beasley (1956) 1 QB 702, Lord Denning observed at pages 712 & 713, No judgment of a Court, no order of a Minister can be allowed to stand if it has been obtained by fraud. Fraud unravels everything. In the same judgment Lord Parker LJ observed that fraud vitiates all transactions known to the law of however high a degree of solemnity, (page 722).
In the instant case it appears a wrong claim has been made with intent to avail undue benefit and it amounts to fraud. In such a situation approval of price list under Central Excise Law cannot come in the way of justice.
7.2 In view of above, I am of the opinion that there is a clear evidence of mis-declaration and fraud with intent to wrongly avail the benefit of notification. The extended period of limitation has been rightly invoked. The appeal is therefore dismissed.
(RAJU) Member (Technical) DIFFERENCE OF OPINION
8.? Whether the appeal is required to be allowed as held by Member (Judicial) or the same is required to be dismissed as held by Member (Technical).
9. The Registry is directed to put up the file before the Honble President to resolve the issue, by reference to a third Member.
(Pronounced in Court on 12.05.2016)
(RAJU) (Ramesh Nair)
Member (Technical) Member (Judicial)
8
Appeal No. E/462/05-Mum