TaxTMI 
TaxTMI 
TaxTMI 
2019 (5) TMI 812
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....ppellant valid through the eye of law? (ii) Whether statement made by the Respondent that sale is not sole consideration for goods supplied free of cost sustainable in law? (iii) Whether stand of the Respondent that appellant suppressed value of free supplies of materials amount to suppression of facts? (iv) Whether imposing penalty on the appellant despite payment of duty before service of show cause notice is valid in law? (v) Whether the show cause notice issued by the Respondent is barred by limitation of one year?" 4.Heard Mr.Girish Neelakandan, learned counsel for Mr.K.S.Guruprasad, learned counsel for the appellant; and Mr.A.P.Srinivas, learned Senior Standing Counsel for the respondent. 5.The appellant/assessee is engaged in the manufacture of plastic containers falling under Chapter Sub Heading 3923.90 of the Schedule to the Central Excise Tariff Act, 1985 and supplying mainly for Oil Companies like Indian Oil Corporation Limited, IBP Limited, etc. The assessee were availing the benefit of SSI Notification No.9/2003-CE, dated 01.03.2003 as amended. They were also availing the facility of Cenvat Credit for adjustment of duty payable on the finished excisable goods....
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....ising due to exceeding Rupees One Crore limit during the year 2001-02 and such payment was effected on 23.09.2002. based on the above details gathered by the Department during the course of verification and based on the information called for from the assessee, the Deputy Commissioner of Central Excise, Division "C", Chennai I Commissionerate issued show cause notice dated 17.01.2005, prima facie holding that the assessee has contravened the provisions of Section 4 of the CEA, 1944 read with Rules 6 and 8 of the Central Excise Rules, 2002 and that the assessee is liable to pay differential duty under proviso to Section 11A of the CEA, 1944 inasmuch as, they have contravened Rule 6 of the Central Excise Rules, 2002 by deliberately not taking into consideration the value of free supply of inputs made by the Oil Companies for deriving the aggregate value of clearances made availing the benefit of Notification No.9/2002- CE, resulting in short payment of duty; that the assessee has contravened the provisions of Section 4 of the CEA, 1944 by suppressing the amortisation cost of the moulds supplied free of cost by the Oil Companies which has resulted in short payment of duty. Thus, it wa....
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....ed that there is no case of value addition from the buyer to the assessee or flow back and the invoice value is the correct assessable value as per Section 4 of the CEA, 1944. Further, the allegation that they have contravened Section 4 of the CEA, 1944, read with Rules 6 and 8 of the Central Excise Rules, 2002 was denied as being without any basis, as the value can be determined under Section 4(3)(d) of the CEA, 1944 and application of Section 4 of the CEA, 1944, read with Rules 6 and 8 of the Valuation Rules is illegal. It is further stated that to avoid harassment, they had made payment of alleged differential duty reserving the right to agitate their claim later. 11.With regard to the proposal to levy penalty, the assessee contended that in the absence of any allegation of fraud, collusion, wilful mis-representation or wilful suppression with an intention to evade duty, the provision could not be invoked. The assessee relied upon certain decisions to support their stand. 12.The Assessing Officer after affording an opportunity of hearing to the assessee, by order dated 30.03.2005 confirmed the proposal in the show cause notice and demanded payment of balance amount of duty, vi....
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....ed the matter mainly on the ground of limitation. While examining the said contention, the Tribunal pointed out that the assessee have not included the amortised cost of free items while arriving the aggregate value of the clearances of Rupees One Crore in terms of SSI Notification No.9/2002 and if such amortised cost of free items is included, the assessee is not eligible for the benefit of SSI exemption. The defence raised by the assessee that they have fully cooperated by furnishing the details of duty liability arrived at on account of non-inclusion of such amortisation of cost of moulds was considered by the Tribunal and held to be a not sufficient ground to hold that the assessee has not suppressed facts with an intent to evade payment of duty. 16.Further, the Tribunal held that it is clear from the records that the assessee has deliberately not taken into consideration the value of free supply of inputs provided to them by the Oil Companies while arriving at the aggregate value of clearances in order to avail the benefit of Notification No.9/2002. Noting the conduct of the assessee in having cleared the finished products by paying duty on the assessable value arrived after ....