9911796707
TMI Blog2008 (8) TMI 299X X X X Extracts X X X X X X X X Extracts X X X X ..... e confirmed the central excise duty amounting to Rs. 5,61,58,199/- and education cess of Rs. 98,897/- under Section 11A(2) of the Central Excise Act, 1944 and imposed equivalent penalty of Rs. 5,62,57,096/- under Section 11AC ibid and demanded interest under Section 11AB ibid. 2. Heard both the sides and perused the records. 3. The appellants are engaged, inter alia, in the manufacture of patent and proprietary medicaments falling under Chapter 30 of the Central Excise Act, 1985. 4. During the period relevant to the present proceedings i.e. 1-7-2000 to 7-1-2005, the appellants were manufacturing and selling certain medicines to one M/s. USV Limited, Mumbai and one M/s. Lifeon Paediatrics Ltd. (now merged with USV Limited). It is the cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Rule 173Q of the Central Excise Rules, 1944 and/or Rule 25 of the Central Excise Rules, 2002. 6. After following the necessary adjudication proceedings, the Commissioner passed the impugned order as referred to above. Hence this appeal. 7. We find that the basic case of the Revenue is that the appellants' buyers have incurred expenses on account of several heads "such as storage, outward handling, distribution, marketing and other expenses." However, the specific heads of expenditure have not been particularized in the Show Cause Notice. It was incumbent upon the Revenue to specify the expenditure incurred by the appellants under each specific head, pointing out the amount of differential duty payable in respect of each such head. It w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... il Price (MRP in short) at which the goods were sold and the selling price of the appellants represented only the expenditure incurred by the buyers on account of the varioas selling and distribution expenses on behalf of the appellants. It is common knowledge that the MRP comprehends several downstream sale elements such as wholesalers' margins, retailers' margins, the margins of the said purchasers, as also the elements of local taxes, freight etc, all of which will form part of the MRP. Therefore, it is not correct to assume that the entire difference between the appellants' sale price to their buyers and the MRP represented only the expenditure incurred by the said buyers. 10. The Commissioner has observed that instead of collecting th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ween the price claimed as assessable value and the wholesale price at which the goods were sold by the buyers. If there existed difference between the prices claimed as the assessable value by the appellants and the wholesale price at which the buyers sold the goods, it was for the Revenue to have the established that the said difference represented first, expenditure on account of the heads set out in the show cause notice, and second, the same was incurred on behalf of the appellants, neither of which has been done in this case. In such circumstances, it was wholly untenable on the part of the Commissioner to have upheld the demand raised in the show cause notice. 13. The impugned order passed by the Commissioner is not sustainable on me ..... X X X X Extracts X X X X X X X X Extracts X X X X
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