LexCOMMISSIONER OF CENTRAL EXCISE, NEW DELHI versus INDIA THERMIT CORPORATION LTD. & ORS.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
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B
[2008] 7 S.C.R. 512
COMMISSIONER OF CENTRAL EXCISE, NEW DELHI
v.
INDIA THERMIT CORPORATION LTD. & ORS.
(Civil Appeal Nos.8350-8354 of 2002)
MAY 1, 2008
[ASHOK BHAN AND. DALVEER BHANDARI, JJ.)
Central Excise Act, 1944 -
s.11A -
Demand -
Suppression of facts -
Extended period of limitation -
c Invocation of - Orders-in-original passed between 22. 1. 1996
and 31.1.1997 in respect of SCNs issued between 27.11.1995
to 3.6.1996 - In all these orders, there was common issue of
valuation of goods
- These orders were not challenged by
department and hence became final - SCN dated 18. 1. 1999
0 issued more than 3 years after the first SCN dated 27. 11. 1995
was issued covering the same issues -
Challenge to - Held:
Since earlier adjudications were accepted on the same issue
for part of the period, revenue cannot be permitted to re-agitate
the same issue for part of the remaining period - There cannot
be second proceedings raising the demand for the same
E period.
s. 4 - Related person - Undervaluation of goods - Supply
of goods by subsidiary company to holding company -
Demand of differential duty on the ground that subsidiary
company undervalued the goods resulting in non-payment of
F duty - Held: Since transaction to holding company was at the
same price as to other purchaser, there was arms length
transaction and hence no undervaluation of goods.
Respondent no.1 had been engaged in the
G manufacture of Thermit Portion.
The 20% of its
production was sold outrightly to Indian Railways and
80% was consumed for the rail jointing work of Indian
Railways undertaken on contract basis.
On 18.1.1999, Department issued notice demanding
H
511
COMMNR. OF CENTRAL EXCISE, N. DELHI v. INDIA
513
THERMIT CORPN. LTD. & ORS.
differential excise duty and imposing penalty on the A
ground that respondent no.1-ITCL had willfully and
deliberately indulged in mis-classification of various
excisable goods through mis-declaration of their nature,
description, suppression of facts and undervaluation of
excisable goods cleared to self for rail jointing at different B
J.
sites of India with an intent to evade payment of excise
duty. Appellate Authority confirmed the demand.
Respondent no.3-ATL had been engaged in the
manufacture of dry moulds and thermit welding
equipments.
c
On 18.1.1999, notice was issued on·ATL demanding·
differential duty for the period 1993-94 to 11.9.1996 and
imposing penalty on the ground that ATL was the
"subsidiary company" of ITCL and was solely dependent D
upon ITCL for supply orders and all the goods
' ,.._
manufactured by ATL were sold to ITCL for further
marketing by them and that ATL under-valued the goods
resulting in non-payment of duty of Rs.14 lacs by ATL.
Respondents contested the issue on merits as well as on
E
limitation on the ground that earlier also a show cause
notice dated 17.1.1996 was issued involving the period
from July 1995 to December, 1995 on the same issue. The
Appellate Authority confirmed the demand.
'>"
Tribunal by its common impugned order, allowed the
F
appeals filed by the respondents both on merits as also
on limitation. In the case of ITCL, on the issue of valuation,
it held that the highest of the price for bulk sale to railways
is comparable price and department cannot take price for
the small quantities sold to railways for assessing the G
products used captively. On the issue of limitation, it held
"
that several show cause notices were issued between
{
27.11.1995 to 3.6.1996 demanding differential duty on
valuation of 'Thermit Portions' cleared for self use
covering the period from May, 1995 to November, 1995. H
514
SUPREME COURT REPORTS
[2008] 7 S.C R
A In these show cause notices, orders-in-original W?H
passed between 22.1.1996 and 31.1.1997. The DepartmPn;
filed these appeals.
Dismissing the appeals, the Court
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HELD: 1. In all these orders, there was a com.,.,~
issue of valuation of thermit portions cleared for self U$"
The~e orders became final and were not challenged b-1!
the df'partment. The present show cause notice da•Pr!
18.1.1999 had been issued more than three years aftr:·
c the first show cause notice dated 27.11.1995 was issued
covering the same issues to twelve clearances of therm it
portions and valuation of dry moulds. The Tribuna!
correctly held that the impugned order overlapped tl-i•
earlier adjudication orders in respect of period fron1
0 7.3.1995 to 31.3.1995. SincExcerpt shown. Read the full judgment & AI analysis in Lexace.