M/S. Transasia Bio-Medicals Ltd. /S v. Cce Daman /S.

Per: Mrs. Archana Wadhwa: Vide his impugned order the lower authorities have confirmed demand of duty of Rs.10,45,867/- along with imposition of penalty of identical amount, on the ground of undervaluation of their final product, by observing that the appellants have not added clearing and forwarding charges being collected by them from their customers.

2. Learned advocate, Shri S.J. Vyas, appearing for the appellant assails the impugned order on the point of limitation. For the period April 2004 to November 2006, show cause notice was issued on 30.03.07 i.e. beyond the normal period of limitation and by invoking the larger period. Learned advocate draws our attention to another show cause notice issued on 27.10.04 proposing to confirm the demand of duty on identical ground for the period July 2002, 2003 and 2004. As such he submits that the entire facts were in the knowledge of the Revenue and by applying the principle of Supreme Court judgment in the case of Nizam Sugar Factory Vs. Collector of Central Excise (A.P.) reported in 2006 (197) ELT 465 (S.C.), the demand would be barred by limitation.

3. After hearing the learned DR who submits that in undervaluation cases each invoice has to be scrutinized and when the appellant was admittedly not disclosing the fact of collection of clearing and forwarding charges from their customers and was not adding the same in the assessable value, the longer period would be available to the Revenue.

4. After appreciating the contentions raised by both the sides we find that admittedly a show cause notice was issued to the appellant on 27.10.04 raising demand on various grounds. One of the issues involved was as regards non inclusion of packing and forwarding charges collected from the customers. For better appreciation we reproduce para 25 of the earlier show cause notice. 25. In view of the facts discussed in forgoing paras, it appears that M/s. TBM has recovered freight in the form of packing and forwarding charges from the customers, but not included in the assessable value for payment of Central Excise duty. They have shown 10% of the cum-duty price as packing & forwarding charges during 2000-01 (from July, 2000) 2001-02, 2002-03 and 2003-04 vide Commercial Invoice issued by them from their Head Office. M/s. TBM has not shown any packing & forwarding charges (freight) in the Central Excise Invoices, during 2000-01, during 2001-02 and 2002-03, they have shown 10% of the cum-duty price as packing & forwarding (freight) charges in the Central Excise Invoices and during 2003-04, they have shown 10% of the assessable value as packing & forwarding (freight) charges in the Central Excise Invoices, but has recovered 10% of the cum-duty price vide Commercial Invoices from their customers.

5. We have also examined the present show cause notice which is on the same ground. For better appreciation we reproduce paras 4 & 5 of the order. 4. Whereas in the view of above, the assessee failed to determine the correct assessable value of their products for discharging central excise duty and has short paid duty amounting to Rs.10,45,867/- (BED Rs.10,27,678/- and Education Cess Rs.18,189/-) as detailed in Annexure A of SCN, by not including the packing & forwarding charges amounting to Rs.6422987/- in the assessable value of products cleared by them, during the period from April 2004 to November 2006 and have, thus contravened the proviso 3(d) of section 4 of Central Excise Act 1944 read with Rule 4,6 & 8 of Central Excise Rules 2002. The Central Excise duty amounting to Rs.10,45,867/- (as detailed in Annexure A) thus short paid as required to be recovered from the assessee under proviso to sub section (1) of section 11(A) of Central Excise Act 1944 along with interest at an appropriate rate on amount of duty not paid, under Section 11AB of the Central Excise Act, 1944.

5. And whereas it appears from the scrutiny of the monthly returns in the form ER-1 filed by them that the assessee have not shown/furnished explicitly and clearly the details of packing and forwarding charges so recovered by them and the invoices showing such charges separately were not provided or intimated to the Department, thus they have suppressed the material facts from the department with an intent to evade payment of Central Excise Duty, in contravention of Central Excise Law, making them liable for penal action under Rule 25 of Central Excise Central Excise Rules, 2002 read with Section 11AC of Central Excise Act, 1944.

6. Comparison of the above extracted portions clearly show that the earlier show cause notice issued in 2004 was on identical ground as the one issued in 2007. The Honble Supreme Court in the case of Nizam Sugar Factory referred supra has held that when the first show cause notice was issued on the same ground as the subsequent one, all the relevant facts can be said to be in the knowledge of the authorities and no suppression of facts can be attributed to the assessee. By following the above decision, we hold that the show cause notice issued on 30.03.07 for the period April 2004 to November 2006 is barred by limitation.

7. At this stage learned advocate fairly agrees that a part of the demand to the extent of around 21,000/- would be within the limitation period. He clarifies that though he has a good case on merits but he is not challenging the said portion of the demand on account of the same being small amount but submits that the same should not be taken as an admission against him on merits and seeks liberty to challenge the same in any other matter which may come up against him. In view of the above clarification by the learned advocate, we confirm the exact amount of duty within the limitation period which will be calculated by the concerned authorities. Appeal is disposed off in above terms. (Dictated & Pronounced in Court) (B.S.V. Murthy) (Archana Wadhwa) Member (Technical) Member (Judicial) jk 4