COMMISSIONER OF CENTRAL EXCISE, JAIPUR versus DUGAR TETENAL INDIA LIMITED

Citation: [2008] 4 S.C.R. 481 · Decided: 07-03-2008 · Supreme Court of India · Bench: ASHOK BHAN · Disposal: Dismissed

Judgment (excerpt)

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[2008] 4 S.C.R. 481 
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) 
COMMISSIONER OF CENTRAL EXCISE, JAIPUR 
A 
v. 
DUGAR TETENAL INDIA LIMITED 
(Civil Appeal No. 4055 of 2002) 
MARCH 7, 2008 
B 
[ASHOK BHAN AND DALVEER BHANDARI, JJ.] 
' 
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Central Excise Act, 1944: 
s.11A(1) - Notification No. 175186-CE dated 1.3.1986 -
Exemption under- Entitlement for, when brand name of foreign c 
collaborator used by assessee on its product - Held: Not 
entitled. 
ss.11A(1) and 4(4)(d)(ii) - Demand - Limitation -
Suppression and mis-statement of facts - Brand name of D 
foreign collaborator used by assessee on its product for 
availing benefit of exemption under Notification No. 175186-
CE -Assessing Officer imposed duty and penalty- Challenge 
to -Assessee's plea that selling price of goods was cum-duty 
price and they were entitled to deduct duty from sale price for E 
determination of assessable value of goods in terms of s. 
4(4)(d)(ii) - Tribunal holding that demand of duty not time 
barred and extended period of limitation was invokable -
Direction to Adjudicating Authority to re-determine assessable 
value of goods-:- Held: Order of tribunal correct since assessee 
F 
suppressed the material fact that brand name used by them 
was owned by foreign collaborator - Extended period of 
limitation invokable for demanding duty. 
Assessee cleared its product under the brand name 
'Tetenal' without payment of duty, claiming the benefit of G 
exemption under Notification No. 175/86-CE dated 
1.3.1986. It was found that the assessee had cleared the 
product affixed with brand name of another person; and 
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thus, was not eligible for the benefit of exemption. The 
481 
H 
482 
SUPREME COURT REPORTS 
[2008] 4 S.C.R. 
A Department issued notice to assessee to pay excise duty 
and to show cause why penalty be not imposed on them. 
The tribunal held that the assessee was not entitled to 
the benefit of Notification and remanded the matter to the 
Adjudicating Authority for fresh decision. The 
B Commissioner upheld the demand of duty raised 
assessee by invoking extended period of limitation under 
proviso to s. 11A(1) of the Central Excise Act, 1944 and 
also imposed penalty. AggrievP.d, assessee filed appeal 
against the Commissioner's order. It also contended that 
c the selling price of the goods was the cum-duty price and 
they were entitled to deduct the duty element from the 
sale price for the purpose of determination of assessable 
value of the goods in terms of Section 4(4) (d) (ii) of the 
Act. Tribunal held that the demand of duty was not barred 
0 by time; and that the extended period of limitation was 
invokable. However, it set aside the quantum of duty and 
the penalty imposed and directed the adjudicating 
authority to re-determine the assessable value of the 
goods after examining the assessee's claim under section 
4(4) (d) (ii) of the Act. Hence the present appeal. 
E 
Appellant-Revenue contended that the assessee 
was fully aware of the fact that during the material period, 
the brand name 'Tetenal' did not belong to them but 
belonged to their German collaborator; that the assessee 
F deliberately suppressed this material fact before the 
department with intent to evade payment of duty on the 
branded goods by wrongly availing the benefit of 
exemption under the Notification No. 176/86-CE; and that 
there was no material on record to support the plea of 
G bonafide belief. 
Assessee contended that the assessee was under a 
bonafide belief that they were entitled to the benefit of 
exemption under the Notification in respect of the 
products manufactured by the assessee and cleared 
H under the brand name 'Tetenal' during the material period 
i 
... 
~ v 
COMMISSIONER OF CEN""."RAL EXCISE, JAIPUR v. 
483 
DlJGAR TETENAL INDIA LIMITED 
4 
t 
and, therefore, they had no intent to evade payment of A 
duty; that the brand name 'Tetenal' on the finished goods 
was duly declared by the assessee in its classification 
list which were accepted by the Revenue; that it was not 
a case of mis-statement or suppression of the fact but 
interpretation of Notification No. 175/86-CE; that they were 
B 
eligible to the exemption treating the brand name 'Tetenal' 
,. 
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as their own product; that demand was clearly barred by 
time; that the extended period of limitation could not be 
invoked; and that the selling price of the goods was the 
cum-duty price and they were entitled to deduct the duty c 
element from the sale price for the purpose of 
determination of assessa

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