LexM/S. DUNCANS INDUSTRIES LTD., CALCUTT versus COMMISSIONER OF CENTRAL EXCISE, NEW DELHI
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A MIS. DUNCANS INDUSTRIES LTD., CALCUTT A v. COMMISSIONER OF CENTRAL EXCISE, NEW DELHI AUGUST 22, 2006 B [ASHOK BHAN AND MARKANDEY KA TJU, JJ.) Central Excise Act, 1944-Sections 35£(2) and I I-A-Deletion of demand of duty short paid and levy of penalty-Show cause notices alleging contravention of duty, one by Assistant Collector and other by C Commissioner-Final adjudication of two notices by Assistant Collector, assessable value determined and demand raised-Thereafter, adjudication of second show cause by Commissioner, demand of duty short paid and penalty levied-Tribunal set aside duty liability as already been adjudicated in the earlier proceedings however, penalty levied upheld-On appeal held: D Department could invoke right of appeal against the order u/s 35 £(2) or issue short levy notice u/s I I-A-Options having not invoked, order attained finality-Further, matter settled under the 1998 Scheme-Also no finding that goods removed clandestinely without assessment-Thus, determination of duty liable and levy of penalty do not arise-Kar Vivad Samadhan Scheme, 1998. E Assessee is engaged in manufacturing of cigarettes. Dispute arose as to whether excise duty was leviable on manufacturing cost plus manufacturing profit and post manufacturing cost and profits arising from post manufacturing operations. Provisional assessments were made from July, 1973 to February, F 1983. Assistant Collector of Central Excise, Calcutta issued show-cause notice dated 8.5.1984 to the assessee for the period July, 1973 to February, 1983 alleging contravention of the central excise duty in respect of cigarettes manufactured and cleared from the factory. Collector of Central Excise, Delhi issued another show-cause notice on 1.10.1986 to tbe assessee for the period September, 1981 to February, 1983 alleging that the assessee had willfully G mis-declared assessable value of cigarettes. Collector of Central Excise, Delhi passed an order directing the Assistant Collector, to make final assessment in the case taking into consideration the material contained in the show cause notice dated 1.10.1986. Assistant Collector Central Excise then issued addendum incorporating the contents of the show-cause notice dated l.10.1986 H 860 I DUNCANS INDUSTRIES LTD., CALCUHA 1•. COMMR. OF CENTRAL EXCISE, 86 J in the show cause notice dated 8.5.1984. Thereafter, the Assistant Collector A finally adjudicated the two show cause notices, determined the assessable value finalized assessments for the entire period, raised demand. On 3.7.1996 Assistant Collector Central Excise issued show cause cum demand notice quantifying the amount of short levy for the period. The same was confirmed on adjudication. Aggrieved assessee filed an appeal. Commissioner remanded the matter to the Assistant Collector Central Excise who recomputed the B amount of duty short paid after adjusting pre-deposited amount. After finalization of the proceedings, Commissioner of Central Excise took up show- cause notice dated 1.10.1986 for adjudication and determined Rs. 17.67 crores due as duty liability and imposed a penalty of Rs. One crore. On appeal the tribunal set aside the duty liability as it had already been adjudicated in the C earlier proceedings but upheld the levy of penalty. Hence the present cross appeals. Disposing of the appeals, the Court HELD: I.I. For the period September, 1981 to February, 1983, the D Commissioner of Central Excise, Delhi passed the order directing the Assistant Commissioner Central Excise, Calcutta to determine the assessable value taking into consideration the materials contained in show cause notice dated 1.10.1986. Thereafter, Assistant Collector Central Excise, Calcutta issued addendum incorporating the allegations made in show cause notice dated 1.10.1986 in the show-cause notice dated 8.5.1984. The effect of the E order passed by the Commissioner of Central Excise, Delhi was that the Assistant Collector Central Excise alone had the jurisdiction to finally adjudicate and determine the assessable value of the goods cleared from the assessee's factory for the entire period and the consequent duty liability.· The two show-cause notices were finally adjudicated by the Assistant Collector F Central Excise on 11.01.1996. The asses8able value was determined and consequent demand raised by finalizing assessments for the entire period July 1973 to February, 1983. lfthe revenue was aggrieved b
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