2017 (3) TMI 778 - AT - Central Excise

Wrong calculation of the duty liability - demand of duty to the extent of ₹ 28,35,468/- along with interests and penalty of an equal amount - Held that - this differential duty has arisen only as a result of a mistake in the calculation made by the respondent. In such cases, the Revenue is expected to raise demand under Section 11A within the normal time limit. Accordingly, the demand falling within the normal time limit upheld and the remaining portion of demand vacated - Penalty imposable u/s 11AC is also set aside. Demands to the extent of ₹ 7,74,558/- on Noophin injection as well as ₹ 2,15,778/- in respect of Sivphine injections - Held that - Increased MRP of injections has been alleged by the Revenue on the basis of investigation carried out in respect of New Pharmaceutical product in Karnataka. However, such investigation report has not been shared with the respondent during the course of the adjudicating proceedings. The concerned witness has also been not made available for examination by the respondents. In view of above, we find no reasons to interfere with findings of Commissioner (Appeals) setting aside this demand. Demand of ₹ 1,66,042 on dyna pro powder - Held that - Revenue was of the view that assessment of these product needs to be done under Section 4A whereas the assessee was of the view that it should be under Section 4 of the Central Excise Act. Commissioner (Appeals) has set aside the demand on account of time bar for the period beyond normal time period. Such a view adopted the Commissioner (Appeals) is upheld. Seizure of goods - Held that - there is no justification for confiscation of the goods valued at ₹ 93,29,605. Since, the differential duty demand has arisen on account of wrong calculation. Consequently, the order of the Commissioner (Appeals) is fully justified in setting aside the confiscation and hence upheld. Appeal disposed off - decided partly in favor of appellant.

Summary

Issues:
1. Calculation of duty liability based on MRP assessment under Section 4A of the Central Excise Act.
2. Allegation of increased MRP for specific pharmaceutical products.
3. Assessment of products under different sections of the Central Excise Act.
4. Seizure of goods due to wrong calculation of Excise duty.

Analysis:
1. The appeals were filed by the Revenue against the Order-in-Appeal confirming duty demand and penalties. The Commissioner (Appeals) set aside the Order-in-Original, leading to the current appeals. The differential duty demand arose due to wrong calculation based on MRP assessment under Section 4A. The Commissioner (Appeals) limited the demand to the normal time limit, upholding the demand for a specific period and setting aside the penalty under Section 11AC.

2. The Revenue alleged increased MRP for "Noophin Injection" without providing crucial investigation reports to the respondent during adjudication. The Tribunal found the lack of evidence and witness examination to support the enhanced MRP claim, leading to the setting aside of this demand by the Commissioner (Appeals).

3. Demands related to "Sivphine Injection" and "Dyna Pro Powered" were also challenged. The allegations were based on incorrect adoption of MRP and differing views on the applicable sections of the Central Excise Act. Lack of shared evidence and justification led to the dismissal of these demands by the Tribunal, in line with the Commissioner (Appeals) decisions.

4. Goods valued at a significant amount were seized due to incorrect Excise duty payment under Section 4A. The Tribunal agreed that the differential duty arose from miscalculation rather than deliberate evasion, justifying the setting aside of the confiscation order by the Commissioner (Appeals). The Tribunal upheld these decisions, emphasizing the need for correct assessment and evidence sharing in such cases.

The Tribunal disposed of the appeals by restricting demands to normal time limits, setting aside penalties, and ordering re-quantification where necessary. The denovo proceedings were directed to be completed within three months, ensuring a fair opportunity for all parties and the admission of additional evidence if required.