LexCOMMISSIONER, CENTRAL EXCISE, MEERUT versus M/S. MONSANTO MANUFACTURE PVT. LTD.
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(2010] 14 (ADDL.) S.C.R. 403 COMMISSIONER, CENTRAL EXCISE, MEERUT A V. M/S. MONSANTO MANUFACTURE PVT. LTD. (Civil Appeal Nos. 5216-17 of 2003) NOVEMBER 26, 2010 [B. SUDERSHAN REDDY AND SURINDER SINGH NIJJAR, JJ.) B Central Excise Rules, 1944-r. 9(A) I Central Excise Act, c 1944 - s. 11 A - Manufacturer-assessee entering into sourcing agreement with a company - Assessee declaring the price of manufactured product on the basis of the agreement - Duty paid on the declared price - Department alleging suppression of material facts against the assessee and demanding additional duty with penalty and interest - Held: The assessee D had not suppressed material facts as the source agreement was within the knowledge of the Department -;- Assessee had not received any direct and indirect consideration over and above as was agreed under the agreement- The show-cause notice was also time-barred. E The respondent-assessee company along with other companies, collectively entered into a sourcing agreement with a company. On the basis of the said agreement, the assessee declared the price of its manufactured product F to the Department. The excise duty was paid on the basis of the price so declared. The Department alleged that the assessee received additional consideration over and above the assessable value declared by it and issued show-cause notice for G demand u/r. 9(A) of Central Excise Rules, 1944 r/w s. 11A of Central Excise Act, 1944. The assessee replied that there was no suppression of material facts as the sourcing agreement, on which the entire transaction was being 403 H 404 SUPREME COURT REPORTS (2010) 14 (ADDL.) S.C.R. A carried on, was made available to the Department; and that the show-cause notice issued in respect of the period from February, 1995 to February, 1999 was barred by limitation. The Commissioner held that the show cause notice was not barred by limitation and that there was suppression s of material facts on the part of the assessee. In appeal, the Tribunal, relying on its own decision passed in Kwality Ice- Cream case, held that there was no direct and indirect consideration received by the assessee as alleged by the Department; and that the show~cause notice was barred c by limitation. Therefore, the instant appeals were filed. Dismissing the appeals, the Court HELD: The Department was not justified in invoking the extended period u/s. 11A of the Central Excise Act, 1944. The entire transaction between the parties was on D the basis of the agreement which was within the knowledge of the Department from March-April, 1995. It is not the allegation in the show-cause notice that the assessee received any direct and indirect consideration over and above as to what has been agreed under the E agreement. The Court has noticed in the connected matter (*Mis. Kwality Ice Cream) that the price fixation was in accordance with the formula agreed to between the parties which has been specifically incorporated in the source agreement. The factum that the source agreement F was filed by the assessee and was within the knowledge of the Department from March-April, 1995 is not in dispute. Thus, the show-cause notice issued on 27.3.2000 was barred by limitation. On the facts of the instant case, the Tribunal has taken the correct view in the matter. [Para 9) G [408-D-G] *Kwality Ice Cream Co. vs. CCE, Chandigarh Judgment datedNovember 26, 2010 passed by Supreme Court - relied on. CIVIL APPELLATE JURISDICTION : Civil Appeal No. H 5216-17 of 2003. COMMNR., CENTRAL EXCISE, MEERUT v. MONSANTO 405 MANUFACTURE PVT. LTD. From the Judgment & Order dated 08.01.2003 of the A Customs Excise &Gold (Control) Appellate Tribunal, New Delhi in Final Order No. 14-15/2003-NB (A), in Appeal No. E/1157/ 201-A & E/1457/2002/A. WITH C.A. Nos. 8456-63 of 2002. K. Swami, B.J. Prasad, B. Sunita, Priya Bhatnagar, Anil Katiyar for the Appellant. Ravinder Narain, Sonu Bhatnagar, Ajay Aggarwal, Mallika B Joshi, Ranjan Narain for the Respondent. C The Judgment of the Court was delivered by B. SUDERSHAN REDDY, J. 1. M/s. Monsanto Manufactures Pvt. Ltd. was the manufacturer of ice-cream falling under sub-heading no. 2105.00. During the period for 1994-95 D to 1998-99 (upto 2/99) manufactured item was leviable to Central Excise Duty at advalorem rates. On 14.10.1~94, M/s. Monsanto along with other companies (which are collectively referred to as "K-NORTH") e
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