TaxTMI 
TaxTMI 
2022 (4) TMI 252
X X X X Extracts X X X X
X X X X Extracts X X X X
....f its factories located at Munger, Bihar. (ii) In the said factory the Appellant draws cigarette sticks for the purpose of testing. The samples are drawn and sent for testing to the quality control laboratory situated within the factory premises to ensure consistency in quality. The samples are taken in the form of both loose cigarette sticks as well as cigarette packets. The tests are conducted on samples drawn from various stages of manufacture at intermediate stages in the manufacturing process and are in the form of sticks from the Cigarette Packaging Department. Remnants of samples after testing are returned to the manufacturing process. (iii) On July 27, 1990 the Appellant received a show cause notice dated July 25, 1990 issued by the Collector of Central Excise, Patna requiring the Appellant to show cause as to why duty of Rs. 65,46,630.32 should not be demanded on removal of cigarette sticks and cigarette in packages ("the samples") for quality control tests within the factory of production during the period March, 1973 to April, 1990 and onwards and as to why penalty should not be imposed upon the Appellant under the specified provisions of th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....der before the Tribunal was allowed by way of remand by Order No. A- 119/KOL/2004 dated January 20, 2004. The matter was remanded to the Commissioner for re-adjudication in terms of observations of the Tribunal in the order dated 23.03.1995. (xi) Pursuant to the order of the Tribunal dated 20.01.2004, the impugned adjudication order dated 11.07.2005 has been passed by the Commissioner. The Commissioner confirmed an increased duty demand of Rs. 28,56,907.88 under Section 11A of the Act. The penalty under Rule 173Q of CER was also increased to Rs. 28,56,907.88 from Rs. 6 lakhs as per the earlier adjudication order. 3. Dr. Samir Chakraborty, Ld. Senior Advocate appearing along with Mr. Abhijit Biswas, Advocate, submits on behalf of the Appellant as under: (a) Assessment of cigarettes during the period March 1973 to February 1983 demanding Rs. 12,06,223/- was on ad valorem basis and all assessments were provisional. The finalization of assessments by the Order No. 2/2002 dated August 29, 2002 of the Deputy Commissioner of Central Excise, Bhagalpur Division referred to in para 26 of the impugned order, was set aside by this Tribunal by Order No. FO....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Industries Ltd. Vs. CCE, 2002 (146) ELT 481 (SC) and Continental Foundation Jt. Venture Vs. CCE, 2007 (216) ELT 177 (SC), there cannot be any allegation of misdeclaration or suppression of material fact or fraudulent act on the part of the appellant with intent to evade payment of duty and the condition precedent for invoking the extended period of limitation is not satisfied. In fact, a decision of the jurisdictional Deputy Commissioner dated November 29, 2001 on the issue involving ITC was accepted by the Department, no appeal having been preferred therefrom. Hence, extended period cannot be invoked. (e) (i) During the period March 01, 1987 to December 31, 1990 the duties of excise on cigarettes were levied on the basis of the length of the cigarettes, in terms of Notification No. 34/87-CE dated March 1, 1987, as amended. The manner in which duties were to be levied and realised as per the said notification (on length basis) left no scope for any provisional assessment of the cigarettes cleared. The clearances were, undisputedly, on final assessment basis. (ii) The period from March 1987 to April, 1990 is covered by SCN dated July ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... passed by the lower authority is sustainable. (ii) The Appellant admitted their liability for the normal period as is evident from the submission of the Sr. Counsel of the Appellant. According to them the last two notices and part period of the other two notices are within the normal period of limitation. But the quantification of the same needs to be done by an authority. (iii) One of the arguments of the Appellant is that the assessment of the relevant period from March 1973 to February 1983 is still provisional and in respect of the rest period there was no scope for provisional assessment. However, in paras 24 and 25 of the impugned order the Ld. Commissioner has held that the said issue has attained finality as per order of the Hon'ble Tribunal dated 23.03.1995. As such, there is no point to take up the issue again. (iv) Again, bottom para of page 5 of the order of this Tribunal dated 23.03.1995 undisputedly shows that the assessment for the period from March 1973 to April 1990 was provisional as per the submission of the Ld. Sr. Counsel of the Appellant before the New Delhi Bench. (v) In view of the above, the appea....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r identical cases the demand was raised on the basis of the effective rate having regard to the relevant exemption notification." 6.1 This Tribunal accordingly set aside the impugned order and remanded the matter for adjudication of the case in the light of the findings and observations made and in accordance with law after granting suitable opportunity of hearing to the Appellant. 6.2 The appeal against this order of this Tribunal dated 23.03.1995 preferred by the Appellant was rejected by the Hon'ble Supreme Court by its judgment dated 10.12.2002 [ITC Ltd. Vs. Collector of Central Excise, Patna, 2003 (151) ELT 246 (SC)]. 7. Pursuant to the above order of this Tribunal, a denovo adjudication order dated 11.07.2005 was passed by the Commissioner, which was set aside and remanded by this Bench of this Tribunal by its Order No. A- 119/KOL/2004 dated 20.01.2004 passed in Appeal No. E/549/02. In paragraph 4 of the order it was held and directed as follows: "4. Since in this case, the order has been passed without finalisation of the provisional assessments as ordered by CEGAT in their order referred to above, we find that the Commissioner, without fi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....should be remanded back to the adjudicating authority in-charge of Munger factory to decide the issues of additions/deductions to arrive at the correct assessable value and quantification of duty. It is observed form the case records that issues of valuation dispute relating to bank charges, interest in excess of CSD, advertisement & sales promotion, below the line expenses (BTL) & interest on trading have been decided by jurisdictional adjudicating authorities at Bangalore, Parel, Saharanpur &Kidderpore factories in the light of ratio laid down by Apex Court. It is submitted by the advocate of the appellant that orders passed by the above adjudicating authorities have been accepted by the department on these deductions/additions and also the method of quantification. This fact can be verified by adjudicating authority of Munger factory and if what is stated by the learned advocate of the appellant is found to be true then the same ratio laid by other jurisdictional adjudicating authorities has to be followed by AC/DC in-charge of Munger factory, including the method of quantification of differential duty. 5. In view of the above observations these appeals filed by the app....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... proceedings." 10.1 Hence the demand for the period from March 1973 to February 1983 confirmed by the impugned order is unsustainable, being premature and hence invalid and bad. 11. For the period from March 1983 to June 1985 we find that the cigarettes were cleared on the basis of "adjusted sale price" as per Notification No. 36/83-CE dated 1.3.1983 and thereafter for the period March 1987 upto February 1987 as per Notification No. 201/85-CE dated 2.9.1985 again on "adjusted sale price". The said notifications are as follows: (i) Notification No. 36/83-CE dated 1.3.1983 Effective rate of duty for Cigarettes - In exercise of the powers conferred by sub-rule (1) of rule 8 of the Central Excise Rules, 1944, read with sub-section (3) of Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957), the Central Government hereby exempts cigarettes of the description specified in column (1) of the Table below and falling under sub-item II (2) of Item No.4 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944), from so much of the duty of excise leviable thereon under the said Acts, as is i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ifying the maximum sale price thereof as the amount specified in the declaration, plus local taxes only; (3) 'sale price' in relation to a package of cigarettes means the maximum price (exclusive of local taxes only) at which such package may be sold in accordance with the declaration made on such package. (ii) Notification No. 201/85-CE dated 2.9.1985 Slab rates of duty on cigarettes - In exercise of the powers conferred by sub-rule (1) of the rule 8 of the Central Excise Rules, 1944, read with sub-section (3) of Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957), the Central Government hereby exempts cigarettes of the description specified in column (1) of the Trade below and falling under sub-item II (2) of Item No. 4 of the First Schedule to the Central Excises and Salt Act, 1944 (l of 1944), from so much of the duty of excise leviable thereon under the said Acts as is in excess of the amount calculated at the rate specified in the corresponding in Column (2) of the said Table. Provided that the amount of duty so levied shall be apportioned in the ratio of 2:l between the duty....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the concept of levying excise duty with reference to the retail sale price of cigarettes instead of the wholesale price at which the manufacturer sold cigarettes at the time and place of their removal under Section 4 of the Central Excise Act. The retail sale price was defined in the said notifications as "the maximum price (exclusive of local taxes) at which the packet of cigarettes may be sold in accordance with the declaration made on such package by the manufacturers". The Appellant cleared cigarettes manufactured by it during this period after paying excise duty on the basis of Maximum Retail Price which was exclusive of local taxes printed by the Appellant on each cigarette packet. Hence, rightly pointed out on behalf of the Appellant, in the clearances in terms of the said notifications there was no scope of provisional assessment or the cigarettes being cleared under such provisional assessments. As appears from the Hon'ble Supreme Court's decision, dispute arose in respect of this period as to whether there was undervaluation of the cigarettes cleared in terms of the said two notifications and demands were raised towards short levy or short payment of central excise duty ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h, whichever is more)- (a) not exceeding 70 millimetres Two hundred rupees per one thousand cigarettes. (b) exceeding 70 millimetres but not exceeding 75 millimetres Three hundred rupees per one thousand cigarettes. (c) exceeding 75 millimetres but not exceeding 85 millimetres Four hundred rupees per one thousand cigarettes. (d) exceeding 85 millimetres but not exceeding 100 millimetres Six hundred rupees per one thousand cigarettes. 1. "Cigarettes packed in approved packages" means cigarettes which are packed for retail sale, in packages which- (a) contain 10 or 20 cigarettes; (b) bear a declaration specifying the length of the cigarettes; and (c) have surface designs approved by the Director (Audit) in the Directorate of Inspection and Audit (Customs and Central Excise): .................................." 14. The manner in which duties are to be levied and realised as per the said notification leaves no scope for any provisional assessments of the cigarettes c....