2009 (11) TMI 816

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....nts are supplying a part of their production to Government Hospitals, District Health Centres and Rural Public Health Schemes, funded by the Government on the basis of rate contracts awarded by the Government authorities by calling Tender applications from various manufacturers. The respondents also sell their products in the open market. On investigation against the respondents, it revealed that instead of clearing their products, under rate contract, directly to the Government Institutions/Hospitals by paying duty on an assessable value based on contract price, the respondents have been supplying their product to the Government Institutions/Hospitals through their distributors by paying duty on a value lower than the appropriate assessabl....

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....r supply/sale of product than that agreed between them and the buyer (Government Institutions) and that laid down in the rate contract. The invoices, no where, show that the order from Government Institutions were for the respondents. Thus the invoices were prepared to give an impression that the goods were sold to the distributors to the normal course of trade on principal to principal basis. 3. A show-cause notice was issued to the respondents asking them why duty should not be paid by them alongwith interest. Since the respondents had already paid the duty demand, they were asked as to why the amount paid by them should not be appropriated in the head of Central Excise duty and that penalty under Section 11AC should not be imposed on ....