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of <h1>Tribunal Upheld Duty Demand for Lack of Transparency</h1> <h3>KUBO COMBUSTION EFFICIENCY CHEM. P. LTD. Versus COMMR. OF C. EX., RAIGAD</h3> KUBO COMBUSTION EFFICIENCY CHEM. P. LTD. Versus COMMR. OF C. EX., RAIGAD - 2008 (225) E.L.T. 391 (Tri. - Mumbai) Issues involved: Determination of duty liability on repacking and relabelling of goods falling under specific chapters, contesting demand on limitation and grounds of revenue neutrality, disclosure of activity of transferring goods to sister unit, invocation of extended period, consideration of revenue neutrality.Summary:1. The appellants, engaged in repacking and relabelling of certain goods, were issued a show cause notice demanding duty for the period 1999-2000 to 31-12-2003. The demand was based on the activity amounting to manufacture and the duty was required to be paid on the basis of cost of production. The appellants contested the demand on limitation and revenue neutrality grounds, claiming they had no intention to evade duty as set off was available in their other unit. They referred to relevant case laws supporting their stance.2. The appellants failed to disclose the activity of transferring goods to their sister unit for captive consumption, which led to the invocation of the extended period for demanding duty. Despite being asked to provide a Cost Accountant's certificate, they did not comply, leading the department to determine the cost of production based on balance sheet figures. The department argued that the appellants suppressed the fact of captive consumption, justifying the extended period.3. The Tribunal noted that the appellants' conduct was not transparent, as they avoided providing crucial information regarding cost of production and continued repacking and relabelling goods despite transferring them to their sister unit. The lack of disclosure and delay in providing necessary documents indicated a lack of clean conduct, undermining the claim of revenue neutrality. Consequently, the extended period was deemed rightly invoked, and the appeal was rejected.Judgment Date: 17-10-2007
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