TaxTMI 
TaxTMI 
TaxTMI 
2021 (5) TMI 868
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.... of P & P medicaments and Bulk Drugs. Physician samples of such medicaments, distributed free of cost to physicians/ doctors/ hospitals for the promotion of the product in market, are also manufactured by the appellant. These physician samples are different from the normal sale packs of regular medicines in terms of quantity, colour and size and it is also clearly written in these samples that they are 'not for sale'. 3. The appellant paid excise duty on physician samples by adopting valuation under rule 11 read with rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 [Valuation Rules] in terms of a Board Circular dated 01.07.2002 during the period 24.04.2005 to 30.09.2006. Such samples were, therefore, cleared on payment of appropriate excise duty on cost of production + 10% profit. 4. The Board, by a subsequent Circular dated 25.04.2005, clarified that valuation of goods of free samples should be done under rule 4 of the Valuation Rules. On verbal communication received from the Range-ll Superintendent Dewas, the appellant disclosed the practice of valuation of physician samples on cost of production + 10% profit and also enclosed ther....
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....ause notice dated 11.12.2008 requiring the appellant to explain why the refund claim of Rs. 43,57,427 /- should not be rejected under the provisions of section 11B of the Excise Act. 11. The refund application filed by the appellant was ultimately rejected by order dated 26.03.2009, by placing reliance upon the Circular dated 25.04.2005 that prescribed for payment of duty under rule 4 of the Valuation Rules. Feeling aggrieved, the appellant filed an appeal before the Commissioner (Appeals), which appeal was also rejected by order dated 30.11.2009. 12. It also needs to be noted that in regard to the 20 rebate claims filed by the appellant before the department for Rs. 4,12,87,601/-, another show cause notice dated 12.12.2011 was issued to the appellant. This show cause notice, if the rebate claims were to be allowed, also proposed appropriation of interest amount of Rs. 14,38,359 /- that was recoverable on the duty amount of Rs. 43,57,427/- paid by the appellant after the due date. The relevant paragraph of the show cause notice is reproduced below: "3. Now therefore, the Noticee is hereby called upon to Show Cause to the Assistant Commissioner Customs and Central Excise, Divisi....
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....r law. 11. Similarly, in the second appeal, the interest was demanded without issuing the show cause notice. When it is so, then we set aside the impugned order and remand the matter to the original authority to decide this issue too afresh, but by providing a reasonable opportunity to the assessee-Appellants to present their case with liberty to file additional evidence, if any, as per law. 12. In the result, both the appeals filed by the assessee-Appellants are allowed by way of remand. Misc. Application stands disposed of accordingly." (emphasis supplied) 15. After remand, the Assistant Commissioner by order dated 10.05.2018, again rejected the refund claim and also approved the appropriation of Rs. 14,38,359 /- as was done by the earlier order dated 30.12.2011. The operative part of the order dated 10.05.2018 passed by the Assistant Commissioner is reproduced below: "(i) I order that the Refund claim of Rs. 43,57,427 /- filed by the assessee claimant M/s Ranbaxy Laboratories Ltd. Dewas vide application dated 05.11.2008 is hereby rejected. (ii) I further Order that the appropriation of Rs. 14,38,359 /- towards interest amount, on the aforesaid recovery, made vide....
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....n of duty paid under protest and particular when no specific ground/disputed issue has been cited by the Appellant for payment of differential duty under protest. Therefore I hold that said payment of differential duty of Rs. 43,57,427 /- was regular payment of Central Excise duty which was perfectly in tune with the settled legal position regarding the assessment of Central Excise duty on Physician Samples and since there was no dispute raised by the Appellant at the time of payment of the differential duty and as all disputes pertaining to assessment of Physician Samples were settled, the department did not find it necessary to issue the show cause notice to the Appellant." (emphasis supplied) 18. In regard to the merits of the refund claim, the Commissioner (Appeals) observed as follows: "11.1 In present case of refund, I find that there is no dispute that the refund claim has been filed in time. As regards the admissibility of refund claim on merit, I find that the Appellant has not cited any ground on merit as to how said payment of differential duty was not due to them and that they had made excess payment. Their only ground for seeking refund is that the differential dut....
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....ention, learned counsel relied upon the decision of the Tribunal in Kodak India Ltd. vs. Commissioner of Customs, Central Excise, Indore (M.P) [2012 (282), E.L.T. 478 (Tri. - Del.)]; (iv) The Tribunal while remanding the matter to the adjudicating authority for passing a fresh order had noticed that show cause notice had not been issued for appropriation of the deposited amount, particularly when the appellant had deposited the amount under protest; (v) The Commissioner (Appeals) failed to appreciate that even in paragraph 11 of the order dated 10.05.2018, the adjudicating authority had admitted that a show cause notice had not been issued; and (vi) The Commissioner (Appeals) committed an error in holding that interest can be appropriated without issuance of show cause notice or without confirmation of the demand. 21. Shri O.P. Bisht learned Authorized Representative of the Department made the following submissions: (i) Since there was no dispute raised at the time of payment of differential duty and the dispute pertaining to assessment of physician samples was settled by the Bombay High Court, a separate show cause notice for the appropriation of differential duty was not....
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....id or short-levied or short-paid or erroneously refunded.- (1) Where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, for any reason, other than the reason of fraud or collusion or any wilful mis-statement or suppression of facts or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty,- (a) the Central Excise Officer shall, within one year from the relevant date, serve notice on the person chargeable with the duty which has not been so levied or paid or which has been so short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice; (b) the person chargeable with duty may, before service of notice under clause (a), pay on the basis of,- (i) his own ascertainment of such duty; or (ii) the duty ascertained by the Central Excise Officer, the amount of duty along with interest payable thereon under section 11AA. (2) The person who has paid the duty under clause (b) of sub-section (1), shall inform the Central Excise Officer of such payment in writi....
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....thorities did not issue a show cause notice to M/s Kandhari Radio Corporation, it would be fixing a liability on a person without divulging the commission and omission done by the assessee . It is also not disputed by the Revenue that the appellant M/s KRC was not issued a show cause. It is a settled law that the issuance of show cause notice to a person is not a mere formality. The show cause notice intimates the recipient about the allegations against him, and seeks his defence against the allegations. If the issuance of the show cause would have been a mere formality, then the provisions of Section 11A of CEA, 1944, would be redundant. The Central Excise Act, being are all encompassing Act, in itself, has provided the mechanism for dealing of the violations of the provisions of the Act. If the Central Excise Act, 1944 provides for the initiation of proceedings against an assessee by issuance of the show cause notice, it is the primary requirement of the law that has to be adhered to by the authorities. In the absence of any show cause notice, the proceedings initiated against an assessee would be vitiated and would be a serious violation of the principles of natural justice. The....
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....nal reiterated that it is necessary to issue a show cause notice before confirming a demand. The relevant portion of the decision is reproduced below: "7 Even when viewed from other angle, the appellants had deposited the said payment, when there was no confirmation of demand. Even subsequent to the said deposit, no show cause notice stand issued to the appellants proposing appropriation of the said deposit made by them. The other show cause notice issued for confirmation of demand, stands vacated by the adjudicating authority and were accepted by the Revenue. The law is clear that the empty containers of modvatable raw materials do not attract duty at the time of their sale. When the appellants has made a lump sum deposit at the instance of the Revenue officer, it was equally obligatory and mandatory for the proper officer to issue the show cause notice for appropriation of the same. The said show cause notice having not been issued, the deposits made by the appellant cannot take the colour of the 'duty' so as to invite the limitation provisions. The appellants were admittedly not required to pay the said duty and the refund claim does not pertain to the routine payment of duty ....