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2016 (9) TMI 227
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....A show-cause notice(SCN) dated 06.12.2004 was issued inter alia to VPPL proposing demand of central excise duty of Rs. 21,35,228/- allegedly evaded during the period July 2001 to June 2004 along with interest thereon, and imposition of penalties. The SCN also proposed imposition of penalties under Rule 26 of the Central Excise Rules 2002 on SVA and also on Sri G. Bhaskar Rao, Managing Director of VPPL. On adjudication lower authority vide order dated 20.04.2006 confirmed demand of Rs. 18,72,890/ along with interest thereon, imposed equal penalty on VPPL and further imposed penalty under Rule 26 ibid of Rs. 50,000/ each on SVA and also on Sri G. Bhaskar. Rao. 1.2. Appeal No.E/848-A/2006 This appeal is filed by Sri G. Bhaskar Rao ,Managing Director of VPPL, aggrieved by the imposition of penalty of Rs. 50,000/- under Rule 26 of Central Excise Rules, 2002, as discussed in para 1.1 supra. 1.3. Appeal No. E/144/2007 This appeal is filed by SVA, aggrieved by the imposition of penalty of Rs. 50,000/ under Rule 26 of CER,2002, as discussed in para 1.1 supra. iv. Appeal No. E/109/2007 This is an appeal filed by Revenue. The facts of the case are that based on i....
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....e notice culminating in Order-in-Original No. 31/2005 dated 22-12-2005 has been dropped. The period in both the show cause notices are overlapping. We have extracted the Paragraphs from 1 to 7 and 7 from the impugned order and also Paragraphs 1 to 7 and Paragraphs 9 and 29 from the Order-in-original No. 31/2005 dated 22-12-2005. On reading of these paragraphs from both these orders, it is clear that the issue is common. It is also clear that the department had knowledge of the entire facts of the case, which resulted in culmination of Order-in-Original No. 31/2005 dropping the demands and the Commissioner accepting the party's plea. Therefore, in the impugned order taking a different view by the same Commissioner is not justified. Relevant facts of the case were within the knowledge of the department and therefore, the subsequent order on the same facts and for the overlapping period, is not justified. We are also of the considered opinion that the Order-in-Original 31/2005 dated 22-12-2005 has already decided the issue in assessee 's favour and therefore, the subsequent order confirming demands, is not justified and it is hit by principles of res judicata also. We up....
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....as follows : "29. I have carefully gone through the case records. I find that the proceedings against M/s. Vasavi Polymers relate yo two issues, one relating to the undervaluation resulting from the wilful misrepresentation of the brands in the invoices at the time of removal of the pipes and the other relating to under valuation on account of sales through their sole selling agent, Vasavi Agencies, which are alleged to be covered within the definition of a 'related person ' defined in Section 4(3)(b) of the Central Excise Act. A separate show cause notice is issued for the first issue relating to mis-representation of brands. 4. There is no dispute between the parties that the above finding is incorrect. Obviously, therefore, the orders-in-original No. 31/2005-06 dated 22-12-2005 and No. 36/2005-06 dated 20-4-2006 had not dealt with the same issue as found by the Tribunal. 5. As regards the finding that the order-in-original No. 31/2005-06 dated 22-12-2005 had reached finality, we find that this finding was recorded before the time allowed under law for filing appeal before the Tribunal had not expired in respect of ....
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....ch appellant may find appropriate. These arguments are too flimsy and we hold that the objections of the Id. counsel regarding maintainability of appeal No.E/109/2007 per se are not tenable or acceptable. 11 . The Id. counsel there upon proceeded with his arguments on appeal E/848/2006, & Appeal No. E/848-A/2006. The main contentions put forth by him are as follows. i) He is confining his arguments to the issue of limitation only and not to the merits of the case. ii) Order-in-Original dated 22.02.2005 and Order-in-Original dated 20.04.2006 both relate to SCNs for overlapping period and listing out same set of facts and circumstances. iii) Order-in-Original dated 22.12.2005, which was passed earlier by same adjudicating authority had set aside the allegations and proposals of related SCN dated 25.02.2005. iv) This being so, the same adjudicating authority is legally barred by limitation in confirming the same issue for overlapping period on SCN dated 06.12.2004, issued on identical facts and circumstances. v) Both the adjudication orders emanate out of proceedings related to section 4 of the Central Excise Act, 1944, concerning undervaluation of pipes cleared, hen....
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.... iv. Aditya Steel Industries Vs. CCE [1996(84) ELT 229 (Tri.)] 14. In respect of Appeal No. E/ 109/2007 on behalf of Revenue, the learned AR Sri. Nagendra Rao submitted that the dropping of proceedings in related Order in original by Commissioner holding that instances of financial relationships between VPPL and SVA cannot be taken to mean mutual interest, is not legal and proper. , in the background of plethora of judgments on issue of related persons: i. Calcutta Chromotype Ltd. Vs. CCE, Calcutta [1998 (99) ELT 202 (SC) ] ii. CCE Ahmedabad Vs. ITEC (P) Ltd. [2002 (145) ELT 280 (SC)] iii. Keerthi PVC Products Ltd. Vs. CCE, Cochin [2005(186) ELT 102 (Tri.-Bang.)] iv. Comptek Laboratories Vs. CCE, Mumbai [2005(183) ELT 290 (Tri.-Mumbai)] v. Powertech International Vs. CCE, Mumbai-II [2001 (131) ELT 461 (Tri. - Mumbai)] vi. Prompt Computer Services Vs. CCE, Bombay [2000(117) ELT 525 (Tri.)] vii. P&B Pharmaceuticals Pvt. Ltd. Vs. CCE, Ahmedabad [1995(76) ELT 616 (Tri.)] 15. He strongly contended that the judgments are overwhelmingly in favour of Revenue and are squarely applicable to the facts of the present case. On behalf of appellant, Sri. Ravi S....
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....ed the proceedings on his finding that VPPL and SVA are not related persons. However it is to be emphasized that the said decision has been arrived only on the basis on merits of the case and not on the issue of time bar, as argued by the counsel for assessee. 19. The 2004 notice was adjudicated later, vide order dated 20.04.2006, albeit by the same adjudicating authority who confirmed the allegation laid out in the SCN, however discounted the overall demand by 5% and inter alia demanded duty of Rs. 18,72,890/ against Rs. 21 ,35,228/ proposed in the notice. 20. It is therefore not the case that both the notices though issued for overlapping period and alleged undervaluation involve identical issue or dispute. The 2004 notice alleges undervaluation by manipulating brand clearances at lower values, while the 2005 notice alleges undervaluation by reason of the two units allegedly being related persons. In fact this difference in issue in both notices is specifically indicated in para 19 of 2004 SCN, the relevant portion of which is reproduced below: 20. Thus, it appears that the management of M/s. Sri Vasavi Polymers Pvt. Ltd., Rajam having majority sharehol....
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....d period of limitation, there is no such estoppel for issue of simultaneous or subsequent SCNs invoking extended periods, for identical noticees, even for identical periods, when the issues alleged in both SCNs are different. In fact the case laws submitted by Ld Counsel to buttress his argument are with regard to issue of subsequent notices, and not with regard to adjudications on different issues raised in different SCNs. 22. Possibly because of misconception and inadequate appreciation of the two aforesaid orders, the learned counsel sought to convey that both the notices are on same issue and hence dropping of demand in one notice will be a limitation to the adjudicating authority to take any other view in the second one. We further find that even in the course of hearing related to the Tribunal's earlier order dated 05.02.2007, the Ld counsel had made the same albeit misconceived argument as the relevant extract of the said order as below will show: 2. It is the submission of the learned Counsel that this very issue was the subject matter of previous proceedings in Order-in-Original No. 31/2005-06 dated 22-12-2005 by which the demands have been dropped. He subm....