TaxTMI 
TaxTMI 
2013 (11) TMI 1415
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....d subsequently closed down the factory at Muthialpet. They were also having their registered office at Bangalore wherein their research centre was also located. Department received information that the appellant was clearing multiplexers under delivery challans without payment of excise duty to their different offices and also to various parties in different parts of the country. Officers conducted investigations in the matter for the period 01-04-2003 to 31-03-2006 and unearthed evidences showing such clearances. The appellants were issued with a Show Cause Notice demanding excise duty not paid and consequent interest and penalties on the three appellants. After adjudication there is a demand of Rs.3,27,08,295/- confirmed against the appellant-company along with appropriate interest. Further there is a penalty equal to the said amount imposed on the appellant company under section 11AC of the Act. Further penalties of Rs.2,00,000/- each have been imposed on Shri. A. S. Narayanachar and Shri. Chakrathar Gandhi under Rule 26 of Central Excise rules 1944. The appellant company had paid Rs. 1,78,67,340/- towards duty liability and Rs.10,68,267/- towards interest liability before the i....
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....e test, they could not have been used for any purpose except as replenishments for short shipments. So the goods were not saleable in the open market or to any other customers. 6. He relies on the following decisions: (i) CCE Vs. Fizer India Ltd - 2008 (231) E.L.T. 642 (Tri. - Del.) (CESTAT); (In this case, Revenue demanded duty on goods transferred to sister unit which prices were more than the price at which goods were sold to independent buyers) (ii) Bharat Petroleum Corporation - 2007 (218) ELT 585 (T) (This case is about value of goods sold at administered prices) (iii) IFB Automative (P) Ltd. -2006 (204) ELT 74 In this case, the goods transferred to other unit was cleared on payment of duty on transaction value from the second unit) (iv) PCC Pole factory - 2003(158) ELT 429 SC (Here the PCC pole manufactured by Electricity Board was used in its business of transmission of electricity no sale to third party was involved) (v) BSNL Vs. CCE 2007 (215) ELT 229 (This is an order at stay stage. Telephone exchanges were installed out of duty paid materials. The prima facie finding was that such telephone exchanges were not marketable) 7. He argued tha....
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....ime the Ld. Advocate submits that the department knew about the fact of clearances of goods without payment of duty by 31-03-2006 but they issued Show Cause Notice only by 01/11/2007 and hence the demand is time barred. He relies on the decision on the following decisions: (i) Nizam Sugar Factory VS. CCE-2006 (197) ELT 465 (SC); (ii) Gammon India Ltd Vs. CCE reported at-2002 (146) ELT 173 (Tri-Mum) as affirmed by the Hon. Apex Court as reported at Commissioner v. Gammon India Ltd. - 2002 (146) E.L.T. A313. (iii) CCE Vs. Bhalla Enterprises-2004 (173) E.L.T. 225 (S.C.). 10. The Ld A. R. for Revenue submits that Rule 8 is applicable where the excisable goods are used in further manufacture of other articles. In this case the excisable goods were sold from the R&D Centre or field offices and there is no question of applying Rule 8 which reads as under: RULE 8. Where the excisable goods are not sold by the assessee but are used for consumption by him or on his behalf in the production or manufacture of other articles, the value shall be one hundred and ten per cent of the cost of production or manufacture of such goods. 11. He submits that the appellant was not using t....
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....s could not be applied except for arguing that the price as per Rule 8 should have been adopted. He submits that this argument is not a legally maintainable argument. 17. The Ld. A. R. for Revenue relies on a few decisions and argues that extended period of time of 5 years from the date of knowledge is applicable in the cases involving suppression, mis-declaration and similar actions with intent to evade payment of duty. The decisions relied upon are,- (i) CCE Vs. Kalvert Foods India Pvt. Ltd. - 2011 (270) ELT 463 (SC). (ii) CCE Vs. Mehta and Co-2011(264) ELT 481 (SC) 18. We have considered submissions on both sides. Firstly, we note that the decisions cited by appellants as mentioned in para6 above has no relevance to facts of this case as may be seen from the facts of each case noted in the same paragraph. We agree with the argument of the Ld. A. R. that the goods cleared without payment of duty for which duty is now demanded cannot be considered as goods cleared to other units of the appellant for further manufacture of other excisable goods. These are cases of clearances for evasion of duty. In such circumstances valuation under Rule 8 will not apply and the value o....
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....nuine supplies to make good short shipments. We also note that there are far too many such cases which indicates malpractice rather than genuine mistake. 21. The argument of the first appellant that SCN was issued after one year from the date of knowledge and hence time barred is not a legally correct argument. Section 11A of Central Excise Act provides time limit from the 'relevant date' as defined therein. As per provisions in this section date of knowledge by the department is not the relevant date in any situation. If that be the case the question will arise how date of knowledge can be ascertained because for issue of notices further investigation and various details will be required. All the details will not be known at one go. The decision of the Apex Court in the case of Nizam Sugar Factory is in a different context. In this case there was a demand on the production of impure Carbon dioxide emanating as a by-product during the process of fermentation of molasses in the appellants factory. On such carbon dioxide demand was issued for SCN dated 28-2-1984 and for the period April, 1982 to September, 1982 the department had raised demands under two different SCNs. Again dema....