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TMI Blog2019 (5) TMI 955X X X X Extracts X X X X X X X X Extracts X X X X ..... initially cleared to the dealers/distributors, who in turn, supplied it to the MID, Jharkhand State Govt. This Tribunal has already considered more or less similar facts and circumstances in Bright Drugs Industries Ltd. s case [ 2016 (7) TMI 298 - CESTAT NEW DELHI ]. In the said case, M/s Bright Drug Industries Ltd. was engaged in the manufacture of pharmaceuticals product and P P medicaments, entered into rate contract with the Maharashtra Govt. as also with some other govt. agencies for supply of medicaments on an agreed price in response to the tender floated by the said govt. agencies. Medicaments were required to be floated by the appellants. The transaction between the respondent and the dealers cannot be considered as true transaction value within the meaning and definition of transaction value prescribed under Section 4(3)(d) of Central Excise Act, 1944. Consequently, the price at which the goods were agreed to be supplied by the respondent to MID, Jharkhand State Govt. be the correct transaction value and duty is required to be paid on same. Extended period of Limitation - penalty - HELD THAT:- The respondent had knowledge of the fact that true transaction value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kolkata participated in the tender. In the tender, various conditions were required to required to be fulfilled which included that only manufacturer or authorized representative/trade distributors are eligible for participation in the said tender. On approval of the tender, the respondents were required and asked to deposit a security amount with the Water Resource Department. Consequently, the Respondent had submitted Bank Guarantee of ₹ 10.00 lakhs as security deposit. The Jharkhand Govt., in accordance with the tender, directed the respondent to supply 9,00,000 meter of 4 Diameter PVC pipes @ ₹ 122/- per meter through letter dated 7.3.2006. The respondent through letter dated 13.3.2006 informed that M/s Ganga Agricultural Centre, their distributor, are authorized and wwould supply the requisite material on their behalf. 3.1 Further, he has submitted that Shri P.S. Zawar, Manager (Excise) in his statement dated 13.4.2007 had provided the breakup of the accepted rate of ₹ 122/- per meter of the pipe; Assessable value is ₹ 97.11, Central Excise duty @16.32% is ₹ 15.85 and Jharkhand Sales Tax @ 8% is ₹ 9.04. Shri Vinay Kumar Sin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition that participants of tender should have turnover of more than ₹ 250.00 crores, sufficient network of dealers throughout the State and the manufacturer should provide quality assurance of the product and timely supply of the product by the dealers and distributors; also should be required to make security deposit of ₹ 10.00 lakhs to ensure the compliance of the said conditions. It is his contention that the qualifying criteria prescribed for competing the bid is for manufacturer on behalf of dealers/sub-dealers; and they have submitted the list of dealers/sub-dealers to the State of Jharkhand, who would be ultimately supplying the pipes to the Government. It is his contention that for Govt. tender, even if the goods are supplied by the dealers/distributors, it is the manufacturers who were required to participate in the bid and made liable for conditions prescribed. On acceptance of the bid, it has been the understanding between the MID of Jharkhand Govt. and the respondent that the order would be placed by MID, Jharkhand on dealers/sub-dealers directly and the pipes and fittings would be supplied by the dealers from the stock held by them. Thus, the respondent s p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the dealers to the Jharkhand Govt. for and on behalf of the respondent as wrongly observed by the learned Commissioner in the impugned order. 7. Further, he has submitted that the ex-factory price of ₹ 88.10 declared on oath before the Hon'ble Jharkhand High Court was excluding the normal trade discount and if discount is allowed from the said price, the assessable value would be around ₹ 48.00 per meter. It is their contention that averments made in the Affidavit before the Hon'ble Jharkhand High Court defending the Writ Petition cannot be taken as adverse ground against the respondent in the present case as both proceedings are independent and separate. Also, it is his contention that the break-up of assessable value of ₹ 97.11 submitted by Mr. P.S. Zawar, Manager (Excise) of the respondent was including discounts and the assessable value after discount should be around ₹ 52/- per meter. Further, he has submitted that the statements of various persons recorded by the Department being under duress, hence cannot be relied upon. Further, he has submitted that the demand is barred by limitation as there has been no suppression of fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng or publicity, marketing and selling organization expenses, storage, outward handling, servicing, warranty, commission or any other matter; but does not include the amount of duty of excise, sales tax and other taxes, if any, actually paid or actually payable on such goods.] 8. This Tribunal has already considered more or less similar facts and circumstances in Bright Drugs Industries Ltd. s case 2016 (343) ELT 1092 (Tri). In the said case, M/s Bright Drug Industries Ltd. was engaged in the manufacture of pharmaceuticals product and P P medicaments, entered into rate contract with the Maharashtra Govt. as also with some other govt. agencies for supply of medicaments on an agreed price in response to the tender floated by the said govt. agencies. Medicaments were required to be floated by the appellants. In these circumstances, analyzing the price charged by the Bright Drugs Industries to the distributors, this Tribunal observed as follows: - 8. The issue required to be decided in the present case is as to whether the clearance of goods by M/s. BDIL to M/s. Anupam for further despatch of the same to the Government authorities in te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contention of adopting the transaction value between the two in terms of the provision of Section 4(1)(a), has no weightage inasmuch as Section 4(1)(a) would not be applicable in such a scenario, the transaction being not on principal to principal basis. The fact that the goods stands supplied directly by the manufacturer and it is only the invoices which are initially being raised by them in the name of M/s. Anupam, who are further raising the invoices in the name of the Government hospital is indicative of the cleverly adopting the fictitious route by the manufacturer. Even if viewed from another angle, the part of the goods which stand directly supplied by the manufacturer to the Government hospital having been assessed at the contracted price, a part of the goods in respect of the same very contract cannot be allowed to be assessed on a different assessable value merely because the appellant have roped in an intermediary agency in between. As such we find no infirmity in the views adopted by the authorities below and hold that the appellant were required to discharge the duty liability at the contracted price in respect of the goods supplied by them to the Government hospitals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eques will totally put us in financial loss and mentally harassment. The department responded positively and again issued a letter for making provisional payment @ ₹ 60/- and balance payment will be made after court s decision which is scheduled on 4th April 06. We have already approached all the districts where our materials reached and the cheques were already issue in most of divisions. More than 2.5 lakhs meters pies are still lying in our godown, that will be executed after court s decision on 4th April, Exact information will be given to you on Monday on 3rd April for quantity of pipes supplied and payment deposited. Hence, in light of the above you are requested to advice me for further action . The second memo dated 04.04.2006 is written by Sri P.K. Mukherjee to Mr. J.M. Totlaji informing him M/s. Ranisati Pipes Inds. Jharkhand, a local pipe manufacturer has filed a case against the order placed by the Department with a plea that Supreme Finolex are charging more than that of their market price Today court has dismissed the case . Whatever the quantity we have dispatched before this case, we are collecting the payment. Balance material will be delivered once the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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