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TMI Blog2006 (8) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... l, the Adjudicating Authority has passed the impugned order. 3.The gist of the impugned order is tabulated herein below : Sl. No. Duty Amount confirmed Grounds Penalty 1. Rs. 24,55,273/- Parallel Invoice/Clandestine removal Rs. 43,73,928/- under Section 11AC 2. Rs. 12,55,633/- Brand Name 3. Rs. 5,10,781/- Clandestine removal 4. Rs. 95,5207- Duty on goods said to have been destroyed 5. Rs. 12,133/- plus Rs. 44,588/- Additional consideration demand on turnover tax 6. Rs. 1,45,913/- Non reversal of Modvat Credit on inputs returned Rs. 1,45,913/- under Rule 57AH In addition, a penalty of Rs. 10,00,000/- has been imposed on the appellant under Rule 173Q and a personal penalty of Rs. 2,00,000/- on Shri Ram Shah, the Managing Director of the appellant company under Rule 209A. Interest has been imposed under Section 11AB of Central Excise Act, 1944 in respect of entire duty demanded. 3.1The learned JCDR who appeared on behalf of Revenue stated that the de novo order of the Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pay duty as the quantities shown in the invoices have gone to the parties mentioned in the said invoices viz., Pfizer Ltd., M/s. Duchem and M/s. SKB. However on the question of valuation, he pleaded that the appellants ought to have discharged duty only on the basis of the Ujagar Prints case and requested for reassessment. He stated that the Tribunal has been consistently holding that in a case where the job worker has been manufacturing the goods in his own facilities he alone would be considered as manufacturer. Further he drew our attention to the decision of this bench in the case of Smithkline Beecham v. CCE [2004 (168) E.L.T. 40 (T) = 2004 (62) RLT 978] wherein all the decisions on the issue including the Indica Laboratories case had been examined and it was held that except in the case of hired labour and in all other cases, the job worker alone is held to be manufacturer and valuation has to be based on the decision in the case of Ujagar Prints only. He stated that a similar view has been expressed in the case of Sidharath Petroproducts v. CCE, New Delhi - 2004 (175) E.L.T. 379. Referring to Indica Laboratories case, the learned advocate pointed out that the Gujarat High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red by SDP is transferred to the godown of SBCH in terms of MOU entered with SBAL. The Central Excise officers investigated the valuation adopted by SDP and came to the conclusion that the assessable value adopted by SDP does not reflect the correct value of the goods, hence they initiated proceedings against SBAL on the ground that SDP can never be considered as an independent job worker. They took the view that SBAL is the legal manufacturer. Therefore, demand was confirmed on SBAL based on their sale price as the basis for assessment. The matter had been gone in depth by the Tribunal and it was held that M/s. SDP are the job workers of the SBAL and therefore, duty discharged by them on the basis of principles laid down in Ujagar Prints case is correct. In this the Tribunal had occasion to examine the decision of the Indica case also. The Tribunal held that "when a person who is doing the job work and has established the facility with his own finance and has functioned independently with the profit or loss being to his account, he cannot be considered hired labour but only a job worker." In our view the ratio of this decision is squarely applicable to the present case. Hence on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 1-3-86 in respect of the Stelbid tablets and had also indicated that they were the owners of the brand name. (f) The appellants paid Excise Duty at the concessional selling rate on the goods sold to M/s. SKB, who were purchasing the goods knowing fully well that the appellants were paying duty at the concessional rate only, because the appellants were considering themselves to be the brand name owners. (g) SKB had not used the brand name Stelbid in India and it is only the appellants who have used this brand name on the product manufactured by them and which use has not been objected to by SKB itself. (h) As per the agreement entered into between the appellants and SKB in 1994, the entire obligation of registering the product with all Governmental Authorities including the Registrar of Trade Marks was on the appellants. 9.When we examine the points urged by the learned advocate, the reasons spelt out by him to hold that the brand name belonged to the appellants are not at all satisfactory. For example, it is his contention that the appellants had applied for registration of the said brand name with Trade Mark Registry. Two documents were shown to us, the letter dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Order-in-Original dated 12-8-1993 passed by the Asstt. Collector of Central Excise dropping the proceedings. 11.The Commissioner has examined this issue. We agree with him that issue involved in the above order passed by the Asstt. Collector is not relevant for this case and is totally unconnected to the availment of SSI Exemption on Stelbid tablets. The issue involved in the above order is limited to the extent of the entitlement of benefit of SSI Exemption in respect of the items, which were not declared in the SSI certificate. The Commissioner has examined every point raised by the appellants and has given his findings that the appellants had used the brand name of another person and hence, they are not entitled for the SSI benefit for Stelbid tablets during the relevant period. We do not have any reason to defer from the Commissioner. Hence, we uphold the Commissioner's finding that the appellants used the brand name of others. 12.The learned advocate strongly contended that the demand is time-barred and longer period cannot be invoked for the following reasons. (a) The Department had the knowledge that the appellants were availing the benefit of SSI exemption right ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en when the investigations show it otherwise. Whenever, an assessee makes a declaration to the Department it is assumed that he speaks the truth. However, if investigations prove to be contrary, then the assessee cannot say that the Department initially accepted the declaration and therefore, they cannot take any action afterwards. In Para 46 of his order, the Commissioner has observed that as follows : "The Intention of M/s. TCPL to defraud the Government revenue is much more conspicuous on examination of their regular invoices and commercial invoices. As per the invoices raised for the purposes of Department, they were availing the SSI exemption and discharging the duty at the concessional rate of duty whereas they were collecting the amount at the full rate of duty through their commercial invoices from M/s. SKB. This fact is also ratified by Shri Rayappa, Senior Manager of M/s. SKB in his statement dated 8-3-2002 as well as in the statement dated 21-6-2002." From the above observations, it is clear that though the appellants paid duty to the Government at concessional rate, they collected full rate from the buyer. Hence, their plea of no intention to evade duty is not accep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and freight charges and demand of Rs. 44,588/- in respect of amounts collected from the customers towards turnover tax. In the present adjudication order, he has not discussed the reasons for inclusion of the above amounts. He has simply referred to the earlier adjudication order where he has dealt with the above issue. As regards the amount of Rs. 12,133/-, it was pointed out by the learned advocate that this relates to freight. The Commissioner has given a finding that even though abatement to freight charges is admissible the details of exact amount collected towards freight charges had not been given. As the above amount includes duty on account of price revision, extra cost of packing, and not only freight, we uphold the demand of Rs. 12,133/-. However, the demand of Rs. 44,588/- on account of turnover tax is not demandable, in view of the settled law that turnover tax cannot be included in the assessable value. Therefore, we drop the demand of Rs. 44,588/-. The penalty under Section 11AC is reduced to Rs. 1,200/- (Rupees One Thousand Two Hundred Only). 17.The Commissioner has confirmed the demand of Rs. 1,45,913/- in respect of return of Modvat availed inputs and pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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