2007 (2) TMI 448 - AT - Central Excise

Summary

Issues Involved:
1. Alleged suppression of facts and evasion of Central Excise duty.
2. Overlapping periods and res judicata.

Summary:

1. Alleged Suppression of Facts and Evasion of Central Excise Duty:
The appeal arises from Order-in-Original No. 36/2005 dated 20-4-2006, confirming demands on the ground of suppression of facts. M/s. Sri Vasavi Polymers Pvt. Ltd. (the assessee) was accused of manipulating brands to evade Central Excise duty. Intelligence gathered by Central Excise officers indicated that the assessee cleared superior branded PVC pipes ('Sri Vasavi' brand) as inferior branded PVC pipes ('Sri Devi' brand) to their marketing agency, M/s. Vasavi Agencies. Verification of records and physical stock at various premises revealed discrepancies, with no 'Sri Devi' brand pipes found despite invoices indicating otherwise. Statements from branch in-charges confirmed that actual brands received were different from those invoiced. The officers seized PVC pipes valued at Rs. 18,50,812/- and detained stock valued at Rs. 31,01,104/- on reasonable belief of undervaluation.

2. Overlapping Periods and Res Judicata:
The learned Counsel argued that the same issue was previously addressed in Order-in-Original No. 31/2005-06 dated 22-12-2005, where demands were dropped. The periods in both orders overlapped, and the Commissioner had accepted the transaction value in the earlier order. The Apex Court judgment in Nizam Sugar Factory v. CCE was cited, stating that subsequent show cause notices on the same facts cannot allege suppression of facts. The learned JDR defended the matter, praying for upholding the invocation of the larger period.

Judgment:
The Tribunal noted that the Commissioner was simultaneously deciding both show cause notices, with overlapping periods. The earlier order (No. 31/2005) had dropped the demands, and the department had knowledge of the entire facts. Therefore, taking a different view in the subsequent order was not justified. The Tribunal upheld the contention that the demands were barred by time and the larger period was not invocable, citing the Apex Court judgment. The impugned order was set aside, and the appeals were allowed with consequential relief.

(Pronounced and dictated in open Court)