2008 (7) TMI 62 - SC - Central Excise

Pan Masala - issue involved is regarding the correct assessable value of the products and the suppression of the said correct assessable value by the respondents tribunal decided that demand is time barred - order passed by the Tribunal that in view of the earlier order passed by the Tribunal which has attained finality department was not justified in issuing the present show cause notice and the same is barred by limitation as well as by the principle of res judicata

Summary

Issues involved:
Correct assessable value of products, suppression of correct assessable value by the respondents.

Analysis:
The case involved an appeal by the revenue under Section 35(1)(b) of the Central Excise Act, 1944 against a judgment passed by the Tribunal. The main issue was determining the correct assessable value of the respondent's products and whether there was suppression of this value by the respondents. The respondents, engaged in manufacturing Pan Masala, were accused of undervaluing goods for central excise duty payment between 1995 and 1996. The revenue issued a show cause notice demanding duty, penalty, and interest. The authority-in-original confirmed the duty demand and penalties, which the respondents appealed against. The Tribunal set aside the original order, citing previous show cause notices and the legality of regional pricing. The Commissioner and the Tribunal both ruled in favor of the respondents, leading to the current appeal.

The Commissioner's order highlighted the uniform pricing strategy of the respondents, explaining how they calculated prices to ensure consistency across regions. The Tribunal's decision was based on the principle of res judicata, stating that the revenue's attempt to issue a fresh show cause notice was unjustified and time-barred. The Tribunal emphasized that all facts and evidence were previously known to the authorities during the earlier proceedings, and no new investigations warranted the new notice. The Tribunal concluded that the issue had already been settled in favor of the appellants in the previous proceedings, preventing the revenue from raising the same issue again.

Ultimately, the Supreme Court upheld the Tribunal's decision, agreeing that the revenue's attempt to issue a new show cause notice was unjustified and barred by limitation and the principle of res judicata. The appeals were dismissed accordingly, affirming the Tribunal's ruling in favor of the respondents.