Appeals allowed, order set aside: Emphasizing merit-based justice

TRANSASIA BIO-MEDICALS LTD. Versus COMMISSIONER OF C. EX., DAMAN

TRANSASIA BIO-MEDICALS LTD. Versus COMMISSIONER OF C. EX., DAMAN - 2013 (297) E.L.T. 429 (Tri. - Ahmd.) Issues Involved:
1. Whether M/s. STBM is a dummy unit and the implications of not issuing a show-cause notice to them.
2. Whether the Cell Packs were actually transported to M/s. STBM, Daman, and the correct valuation of these goods.
3. The applicability of duty exemption on diagnostic reagents used with auto analyzers.
4. The inclusion of transportation charges in the assessable value under the Central Excise Valuation Rules.
5. The eligibility of the appellant for SSI exemption for the year 2001-2002.
6. The applicability of extended period for demand due to alleged suppression or misstatement of facts.
7. The imposition of penalties under Section 11AC and interest under Section 11AB.

Detailed Analysis:

1. Dummy Unit and Show-Cause Notice:
The Tribunal examined whether M/s. STBM was a dummy unit. The Commissioner held that M/s. STBM was a dummy unit as it had no employees, and all its operations were managed by M/s. TBM employees. The goods never reached M/s. STBM's premises, making it a non-existent company. Thus, a show-cause notice to M/s. STBM was deemed unnecessary.

2. Transportation and Valuation of Cell Packs:
The Tribunal scrutinized the transportation and valuation of Cell Packs. The appellant provided documents proving the independent existence of M/s. STBM, including income-tax returns, annual returns, and board meeting minutes. The Tribunal found these documents genuine, indicating that M/s. STBM was not a dummy unit. The physical movement of Cell Packs was not obligatory, and the business practice was acceptable. The Tribunal concluded that M/s. STBM was not a dummy unit and the valuation of goods should consider the actual transaction values.

3. Duty Exemption on Diagnostic Reagents:
The Tribunal addressed the contention that diagnostic reagents were meant for use with auto analyzers, which were exempt from duty. The appellants argued that diagnostic reagents supplied as free replenishments or demo kits should be considered as discounts in kind, exempt from duty. The Tribunal accepted this argument, noting the absence of evidence to the contrary.

4. Inclusion of Transportation Charges:
The Tribunal examined whether transportation charges should be included in the assessable value. Rule 5 of the Central Excise Valuation Rules excludes the cost of transportation from the place of removal to the place of delivery. The Tribunal found that the appellants were eligible for deduction of actual freight charges from their godown to the customers' premises, aligning with the Supreme Court's decision in Baroda Electric Meter.

5. SSI Exemption for 2001-2002:
The Tribunal evaluated the eligibility for SSI exemption. The Revenue argued that the clearance value exceeded Rs. 3 crores, including packing and forwarding charges, demokits, and overvalued Cell Packs. The appellants contended they had not collected duty from customers for clearances made under SSI exemption. The Tribunal accepted the appellants' contention, finding no evidence to prove otherwise, thus granting SSI exemption.

6. Extended Period for Demand:
The Tribunal considered the applicability of the extended period for demand due to alleged suppression or misstatement of facts. The appellants argued that their records were subject to audit and verification, and they had a bona fide belief regarding freight charges. The Tribunal found no evidence of suppression or misstatement with an intention to evade duty, citing various judgments supporting this view.

7. Penalties and Interest:
The Tribunal examined the imposition of penalties under Section 11AC and interest under Section 11AB. Given the absence of suppression or misstatement, the Tribunal found the imposition of penalties and interest unsustainable.

Conclusion:
The Tribunal allowed the appeals filed by M/s. Transasia Bio-Medicals Ltd. and others, setting aside the order of the Commissioner of Central Excise & Customs, Daman. The decision emphasized the importance of examining each case on its merits, evidences, and legal principles, ensuring justice is served without undue reliance on precedents.