Cce, Jaipur-I vs M/S.Mittal Pigment Pvt.Ltd

(Arising out of OIA No.106(MPM)CE/JPR-I/2006 dt.3.4.2006 passed by the CCE(Appeals), Jaipur-I)

Date of Hearing/Decision 21.09.2015

For approval & Signature:

Honble Smt.Sulekha Beevi C.S., Member (Judicial)

Honble Mr.B.Ravichandran, 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? No 2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3. Whether their Lordships wish to see the fair copy of the order? seen 4. Whether order is to be circulated to the Department Authorities? yes

CCE, Jaipur-I Appellant

Vs.

M/s.Mittal Pigment Pvt.Ltd. Respondent

Appearance:

Present for the Appellant: Shri Govind Dixit, AR

Present for the Respondent: Shri Vijai Kumar, Advocate

Coram: Honble Smt.Sulekha Beevi C.S., Member (Judicial)

Honble Mr.B.Ravichandran, Member (Technical)

Final Order No.52943/2015

Per: Sulekha Beevi C.S.

The above appeal is filed by Revenue challenging the impugned order by which the Order-in-Original which confirmed the duty demand, interest and penalty was set aside being time barred.

2. Brief facts are as under:

2.1 The respondents are engaged in the manufacture of Zinc Oxide, Sodium Antimonate, Nickel Oxide, etc. and ere clearing the same on payment of duty. They were also manufacturing these goods on job work basis for M/s.Shambhu Traders Pvt.Ltd (hereinafter referred to as STPL) and such goods were being cleared on payment of duty at the value declared by STPL. The goods so manufactured for STPL were cleared on payment of duty to M/s.Videocon International Ltd to be used as input in their dutiable final products. A show cause notice dated 21.10.2005 was issued for the period 2001-2002 to 2003-2004 alleging that respondent had undervalued the goods manufactured for STPL on job work basis. The notice culminated in the Order-in-Original which confirmed the duty demand of Rs.8,65,516/- along with interest and imposed equal amount of penalty. In appeal, the Commissioner (Appeals) set aside the same observing that there is no suppression of facts or wilful mis-statement on the part of the Respndent-assessee and that the extended period is not invokable. Aggrieved, the Revenue is before the Tribunal.

3. The learned DR, Shri Govind Dixit vehemently argued that the Commissioner erred in holding that the demand is time barred. The respondent did not include all expenses and did not provide cost sheet and has suppressed assessable value of goods cleared on behalf of STPL. Further that the decision laid in M/s.Pahwa Chemical (P) Ltd. Vs. CCE, Delhi reported in 2005 (189) ELT 257 (SC) is not applicable to the case and that the Commissioner has wrongly held in favour of the assessee by following the decision laid in the said judgement. On scrutiny, it was found that the price declared was not true. Respondent had undervalued the goods with intention to evade payment of duty. Accordingly, that the show cause notice issued invoking extended period was proper, and that demand was rightly confirmed by the adjudicating authority.

4. Against this, the learned counsel for the Respondent reiterated the findings of the Commissioner in the impugned order and argued that there was no suppression of facts or wilful mis-statement as has been observed by the first appellate authority. The decision of the Apex Court in Pahwa Chemicals Pvt.Ltd. (supra) squarely covers the case of Respondent and has been rightly applied by the Commissioner.

5. We have heard both sides and perused the records carefully. At the outset, it has to be stated that the foremost issue for consideration is whether the Commissioner was right in holding that the demand is barred by limitation. The appellant urge that in the self assessment scheme, the responsibility of correct declaration rests with assessee. On scrutiny it was found that the price so declared was highly undervalued and that therefore extended period is invokable. On perusal of the Order-in-Original, it is seen that though the respondent assessee had raised the plea of limitation, the adjudicating authority has failed to consider the same. There is no discussion as to whether there was suppression on the part of assessee. In the impugned order, the Commissioner has taken note of the fact that the price declared by the assessee was not objected by the Department. It is seen that the respondent submitted price list in form 2C along with covering letter dated 3.4.2001 to the jurisdictional Superintendent informing that the respondent will be receiving Zinc Die Cast scrap from STPL, respondent intends to take credit of duty on it, manufacture the Zinc Oxide and clear the same to M/s.Videocon Narmada Glass (A division of Videocon International Ltd.) under brand name STPL and will be paying duty on value declared by STPL @ 67/- per kg.

The respondent then also filed declaration dated 4.4.2001 under 173B of Central Excise Rules, 1944 declaring intention to manufacture branded goods for STPL and to pay full duty without availing exemption under Notification No.9/2001-CE. On entering into further contracts with STPL the Respondent has vide letters dated 24.5.2001 and 1.8.2001 informed the department of the manufacture of goods for STPL on job work basis and declared the price. The Commissioner (Appeals) has observed that it is evident from the above letters/declarations that the department was well aware that the respondent assessee was manufacturing goods for STPL on job work basis and clearing them on payment of duty at price declared by STPL, and that the contention of the Revenue that the Respondent undervalued the goods with intention to evade payment of duty is without basis and untenable. We are in full agreement with the observations made by Commissioner (Appeals) In the letter dated 3.4.2001 itself the Respondent has informed the department about the payment of duty on the basis of price declared by STPL. On such score, the show cause notice dated 21.10.2005 is time barred.

When all facts are within the knowledge of the department, they ought to have immediately informed the assessee if there was any shortcoming in the declaration of price or valuation of goods. We therefore are of the considered view that the impugned order calls for no interference. The same is sustained.

6. In the result, the appeal is dismissed.

(pronounced in open court)

(B.Ravichandran) (Sulekha Beevi C.S) Member (Technical) Member (Judicial)

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