PAPER PRODUCTS LTD . versus COMMNR. OF CENTRAL EXCISE, MUMBAI

Citation: [2007] 8 S.C.R. 315 · Decided: 12-07-2007 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Disposed off

Judgment (excerpt)

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PAPER PRODUCTS LTD . 
A 
v. 
COMMNR. OF CENTRAL EXCISE, MUMBAI 
JULY 12, 2007 
[DR. ARIJIT PASA Y AT AND LOKESHWAR SINGH PANT A, JJ.] 
B 
~ 
/ 
Central Excise-Adjudication proceedings-Remand-Held: On facts, 
remand was not an open one-Terms of the remand were limited and specific. 
Appellant-assessee is engaged in the manufacture of printed flexible c 
packaging laminates and pouches. The printing of these goods is done by 
means of printing cylinders manufactured by a division of Appellant Appellant 
did not include the charges for making printing cylinders in the assessable 
value of the laminates and pouches. The Department accordingly demanded 
duty which was alleged to have been short levied and also imposed penalty. D 
Tribunal remanded the matter for decision on two issues, viz. the correct rate 
'T 
and amount of duty and the correct amount of penalty payable. On remand, 
Appellant took the plea that the cost of printing cylinders had been amortized. 
The Commissioner, however, declined to entertain the plea of Appellant holding 
that the question of amortization could not be considered in the remand 
proceedings. 
E 
The question which arose for consideration in the present appeals is 
whether the remand was limited to the determination of correct rate of duty 
and penalty and it was not open to the Appellant to take the plea regarding 
amortization of the cost of printing cylinders. 
F 
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Disposing of the appeals, the Court 
HELD: 1.1. The decision of the Tribunal which remanded the matter 
was clear and specific as to the terms of the remand. The Tribunal noted in 
paragraph 6 that the stand taken before it, that the cost of the cylinder had G 
been amortized in the price of the packing material was totally contradictory' 
to the stand taken before the adjudicating authority, in the absence of any 
....... • 
material placed before him to support the present stand. It said "in these 
circumstances, it follows that the amount collected unde:- separate invoices 
represented, as admitted before the Adjudicating Authority, a part of the cost 
315 
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316 
SUPREME COURT REPORTS 
(2007) 8 S.C.R. 
... 
A of printing cylinder". While it noted in paragraph 8 in accordance with the 
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view taken in Flex Industries case that the cost of Cylinder must be reflected 
).... 
in the assessable value of the final product over a considerable period by 
amortizing the cost, it stressed again that the appellant before it had no case 
before the adjudicating authority and the costing of cylinder had been 
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amortized. It specifically stated in paragraph 12 the matter was being 
remanded to the adjudicating authority for passing a fresh order after deciding 
the two aspects, what is the correct rate of duty, if any, chargeable, the correct 
amount of differential duty, if any payable, and the correct amount of penalty. 
'( 
f Para 6) (318-E-H; 319-AI 
c 
1.2. A bare reading of para IO makes the position clear that it only 
related to the particular plea and no other plea which was covered by para 8. 
The scope of limited remand has been highlighted by this Court in Mohan 
" 
Lal' s case. Above being the position, there is no merit in these appeals so far 
as levy of duty is concerned. However, considering the factual scenario the 
penalty is reduced to Rs.5 lakhs frol'n Rs.IO lakhs. 
D 
f Paras IO and I I) 1319-F; 320-E) 
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Mohan Lal v. Anandibai and Ors., AIR (1971) SC 2177, relied on. 
Flex Industries Ltd v. Commissioner of Central Excise, Meerut, (1997) 
91 ELT 120, referred to. 
E 
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 5317-5318 of 
2002. 
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j 
From the Judgment and Order No. CII 1838-39-02-WZB dated 11.06.2002 
of the CEGAT. West Bench at Mumbai in E-Stay-468/02-Mum and Appeal E/ 
F 566/02-Bom. 
• 
... 
WITH 
C.A. No. 7098 of 2005. 
G 
D.A. Dave Darius Shroff, R.N. Karanjawala, Ruby Singh Ahuja, Bharat 
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Singh, Manu Aggarwal and Manik Karanjawala for the Appellant. 
Nagendra Rai, Aruna Gupta and B. Krishna Prasad for the Respondent. 
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The Judgment of the Court was delivered by 
H 
PAPER PRODUCTS LTD. " COMMNR. OF CENTRAL EXCISE, MUMBAI [PASA Y AT, J .) 
317 
DR. ARIJIT PASAYA T, J. l. Challenge in these appeals is to the orders A 
passed by the Customs, Excise and Gold (Control) Appellate Tribunal, West 
Regional Bench at Mumbai (in short the 'CEGA T') and Customs, Excise and 
Service Tax Appellate Tribunal, West Zonal Bench at Mumbai (in short the 
'CESTAT'). 
2. As common points are

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