2004 (8) TMI 299 - AT - Central Excise

Summary

Issues:
1. Allegation of selling whole production at a lower price to evade duty.
2. Allegation of clearing products without payment of duty.
3. Denial of small scale exemption notification.

Analysis:

1. The appellants were accused of selling their entire production of 'Vital-Z' at a reduced price to a related company to avoid duty payment. However, the appellants argued that they also sold the same product to other dealers at similar prices, which was not considered by the adjudicating authority. The tribunal found that the authority failed to consider crucial evidence, such as a detailed correlation chart of goods cleared, leading to the duty confirmation being set aside. The matter was remanded for a fresh decision, emphasizing the need for a fair opportunity for the appellants to present their case.

2. Regarding the allegation of clearing products without paying duty, the appellants presented evidence in the form of a detailed chart correlating goods cleared with invoices where duty was paid. Despite this, the adjudicating authority dismissed this evidence, claiming it was not shown to investigating officers. The tribunal noted that statutory records were used to support the claim, indicating a lack of thorough examination by the authority. As a result, the duty confirmation and penalties imposed were set aside, and the matter was remanded for proper consideration.

3. The denial of the small scale exemption notification to M/s. Helviina Pharmaceuticals Pvt. Ltd. was based on the commonality of two directors between M/s. Helviina Pharmaceuticals Pvt. Ltd. and M/s. Unicure Remedies Pvt. Ltd. The appellants argued that there was no mutual interest between the two private limited companies and cited a relevant Board circular. The tribunal agreed that each limited company is considered a separate entity for exemption purposes and found no evidence of financial flow back between the companies. Consequently, the denial of the exemption to M/s. Helviina Pharmaceuticals Pvt. Ltd. was deemed unsustainable, and the appeal in this regard was allowed.

In conclusion, the tribunal set aside the duty confirmation and penalties related to the selling and clearance issues, remanding them for reconsideration. The denial of the small scale exemption to M/s. Helviina Pharmaceuticals Pvt. Ltd. was overturned based on the lack of evidence of financial connection between the companies. The appeals were disposed of accordingly.