COMMISSIONER OF CENTRAL EXCISE,CHANDIGARH versus M/S. PEPSI FOODS LTD.

Citation: [2007] 7 S.C.R. 821 · Decided: 29-05-2007 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Case Partly allowed

Judgment (excerpt)

-J 
-, 
COMMISSIONER OF CENTRAL EXCISE,CHANDIGARH 
A 
v. 
MIS. PEPSI FOODS LTD. 
MAY 29, 2007 
B 
[DR. ARIJIT PASAYAT AND LOKESHWAR SINGH PANTA, JJ.] 
Central Excises Act, 1944 -s. I I-A-Dispute as to assessee 's claim for 
sales tax exemption pending before High Court-Assessee re-assessed the 
clearance by including sales tax element originally excluded from price and c 
paid differential duty of Rs. 67 lakhs-lssuance of show cause notice after 
four years on allegation that assessee evaded duty of Rs. 95 /akhs in regard 
to Rs. 2 Crores collected towards sales tax-Extended period of limitation-
Invocation of-Held: Invocable as no information was given regarding deposit 
and about the claim of exemption and calculation. 
D 
Respondent-assessee claimed sales tax exemption which was rejected. 
Sales Tax Authorities and also the Tribunal rejected the same. Thereafter, 
excise duty was assessed and paid on the value worked out after deducting 
the sales tax payable from the price during July 1995 to March 1996. While 
the dispute with the Authorities was pending before the High Court, assessee E 
re-assessed the clearance by including the sales tax element originally 
excluded from the price and paid the differential duty of Rs. 67 lakhs in 
November 1996. Show cause notice was issued after four years alleging that 
assessee had evaded duty of Rs 95 lakhs in regard to Rs 2 crores collected 
towards sales tax and demand duty was made; and was confirmed. Demand for 
differeential ~uty was made after adjusting the payment inade and also penalty F 
was imposed. Respondent challenged the order. Tribunal held that the demand 
was time barred. Hence the present appeal. 
Appellant contended that the exemption was claimed under the relevant 
sales tax laws but there was collection of sales tax which was admitted by the 
accountant on 26.10.1999 and also by the assessee; and that the assessee G 
accepted that there was no intimation given about the sales tax exemption or 
the deposit msde to the Ranve Officer or any other Authority. 
Partly allowing the appeal, the Court 
821 
H 
822 
SUPREME COURT REPORTS 
[2007] 7 S.C.R. 
A 
HELD: 1.1. The Commissioner found that there was no evidence ofany 
intimation about sales tax exemption produced by the assessee. It was only 
indicated in the reply to the show-cause notice that the matter was pending. 
!Para 411824-AI 
1.2. Assessee submitted that the sales tax authorities denied the 
B exemption and the matter was pending before the High Court. T~e deposit 
was made as there was a dispute. To a query made as to why the deposit was 
made even there was nothing payable as claimed, the reply was that it was 
paid due to pressure. There was no averment made at any stage taking such 
a plea. tpara 511824-E, Fl 
c 
1.3. The extended period oflimitation is applicable as no information 
c. 
~Jr.~.s given regarding deposit and about the alleged claim of exemption and the 
calculatiq_n. I Para 61 (824-GI 
t4. Tribunal is to decide whether the benefit under section 4(4)(d)(ii) 
D of the Central Excise Act, 1994 is available to be granted. It would take note 
of the decision if any rendered if any rendered in writ petition pending before 
the High Court. !Para 7] (824-G; 825-Al 
CIVIL APPELlA TE JURlSDrCTION : Civil Appeal No. 5118 of2002. 
E 
From the Judgment and Order No. 403/2001-A dated 27. 1 l.2001 of The 
Customs, Excise & Gold (Control) Appellate Tribunal, New Delhi in Appeal 
No. E/94812001-A. 
Nagendra Rai, Sr. Adv., K.K. Senthilvaran, K. Subba Rao and B.K. 
Prasad for the Appellant. 
F 
M.P. Devnath and V. Balachandrim 'for the Respondent. 
The Judgment of the Court was delivered by 
DR. ARIJIT PASAYAT, J. I. Challenge in this appeal is to the order 
G passed by the Customs Excise and Gold (Control) Appellate Tribunal, West 
Block, New Delhi (i11 short 'CEGA T') allowing the appeal of the respondent 
(hereinafter referred to as the 'assessee'). By the impugned order, the CEGAT 
also held that the removal of goods and payment of duty took place between 
( 
July 1995 to March 1996. The assessee had paid differential duty as worked 
out by them also in November 1996. In these circumstances, there is no 
H 
COMMNR. OF CENTRAL EXCISE.CHANDIGARH v. PEPSI FOODS LTD. [PASAY AT, J.) 823 
factual basis to the allegation that the assessee suppressed any material facts. A 
Show-cause notice dated 1.6.2000 was issued almost four years after the 
payment of the differential duty by the assessee, well 

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