2013 (4) TMI 902 - AT - Central Excise

Mis-declaration of goods - it was alleged that certain products manufactured by the appellant were cosmetic products not ayurvedic medicines - certain clearances made to related party - Held that - There is no dispute about the fact that Apex Court had given certain directions for re-quantification of duty in para 33 of the judgment - From perusal of the impugned order it is clear that re-quantification has not been done in terms of this order while the appellant plead that all the necessary information had been provided. The matter is once again remanded to the Commissioner for re-quantification of the duty demand strictly in term of the directions of the Apex Court - appeal allowed by way of remand.

Summary

Issues:
1. Classification of products as ayurvedic medicines or cosmetics.
2. Valuation of products for duty calculation.
3. Application of extended limitation period.
4. Imposition of penalty on the appellant.

Classification of products as ayurvedic medicines or cosmetics:
The case involved a manufacturer of ayurvedic drugs facing allegations of duty evasion by misclassifying cosmetic products as ayurvedic medicines. The investigation revealed that certain products were cosmetics, not ayurvedic medicines. The Tribunal initially classified 22 products as ayurvedic medicines and the rest as cosmetics, attracting different duty rates. The Supreme Court later confirmed 20 products as ayurvedic medicines and directed re-determination of value for duty calculation.

Valuation of products for duty calculation:
The Apex Court provided directions for re-determination of value and re-quantification of duty based on sales to related parties and independent buyers. The Commissioner re-quantified the duty demand for specific periods, dropping some demands. However, the appellant contested that the re-quantification was not done in line with the Apex Court's order, leading to a remand for further adjudication.

Application of extended limitation period:
The Tribunal earlier held that the extended limitation period was not applicable, making certain Show Cause Notices time-barred. The matter was adjudicated de-novo for re-quantification of duty demands, resulting in the confirmation of duty for specific periods.

Imposition of penalty on the appellant:
The Tribunal set aside penalties imposed on related parties but left the question of penalty on the appellant open. The appellant challenged the duty re-quantification, arguing that necessary information had been provided, leading to a remand for re-quantification in line with the Apex Court's directions.

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