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TMI Blog2023 (9) TMI 918X X X X Extracts X X X X X X X X Extracts X X X X ..... RA VERSUS M/S VADILAL GASES LTD. ORS. [ 2017 (1) TMI 1311 - SUPREME COURT ] where it was held that the Tribunal has rightly observed that if no treatment was given to the gas purchased by the appellant, the customers of the appellant would not have been purchasing helium from the appellant at a price 40% to 60% above the price at which the appellant was purchasing. The issue regarding determining whether the related party transaction exist in this case or not, as per Section 4(1) (b) of Central Excise Act, 1944 read with Rule 9 of Central Excise (Valuation) Rules, 2000 is concerned, since the matter has already been remanded back to the original adjudicating authority by impugned order-in-appeal dated 31.03.2015, the Adjudicating Authority while deciding related party issue should also re-adjudicate the matter of dutiability of the purified/ graded Hydrogen gas as per the Hon ble Supreme Court decision in the appellant s own case COMMISSIONER OF CENTRAL EXCISE, VADODARA VERSUS M/S VADILAL GASES LTD. ORS. [ 2017 (1) TMI 1311 - SUPREME COURT ]. Since the matter has already been remanded back by the Commissioner (Appeals) to the original adjudicating authority and forgoing paras, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment is of the view that process of commercial grade hydrogen gas for purification, grading and labeling amounts to manufacture and therefore, the appellant namely M/s. Vadilal Gases Limited should have discharged Central Excise duty amounting to Rs. 23,76,942/-. Penal provisions under Rule 25 of Central Excise Rules, have also been invoked against M/s. Vadilal Chemicals Limited and penal provisions under Rule 26 of Central Excise Rules, 2002 has also been invoked against Shri Virendra Ramchandra Gandhi, Manager of M/s. Vadilal Gases Limited and Managing Director of M/s. Vadilal Chemicals Limited. 3. It is relevant to mention that the impugned show cause notice dated 08.06.2011 also mentions that transaction between M/s. Vadilal Gases Limited and M/s. Vadilal Chemicals Limited amounts to related party transaction as per provisions of Section 4 of Central Excise Act, 1944 and therefore, the value of goods needs to be guided by Central Excise Rules, and Rule 9 of Central Excise (Valuation) Rules, 2000. It has been contention of the Revenue that the value for the purpose of Central Excise duty, should have been the value of clearances of hydrogen gas effected/ sold by M/s. Vadilal Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also impose Penalty of Rs, 100000/- (one lakh only) on Shri Virendra Ramachandra Gandhi, Chairman and Managing Director of M/s Vadilal Gas Ltd. and M.D. of M/s Vadital Chemicals 5.4 I also confirm Central Excise duty amounting to as mentioned below in the table for the relevant period under section 11A (10) (Erst while Section 11A (2)) of the Act as applicable and the same should be recovered from them: Sr. No. Show Cause Notice No. Date Amount (Rs.) 1 V.Ch.28(4)35/Vadilal Gases/MKP/11-12 dtd. 05.08.2011 16,209/- 2 V.Ch.28(4)41/Vadilal Gases/MKP/11-12 dtd. 23.09.2011 1,94,243/- 3 V.Ch.28(4)61/Vadilal Gases/ SCN/MKP/ 11-12 dtd. 14.03.2012 2,30,423/- 4 V.Ch.28(4)27/SCN/Vadilal Gases/MKP/ 12-13 dtd. 26.10.2012 4,44,989/- 5 V.Ch.28(4)/7/Vadilal Gases/MKP/SCN/ 13-14 dtd. 04.06.2013 4,74,603/ 6 V.Ch.28(4)/Vadilal/D.MKP/Adc/Adj/ 102/2013-14 dtd. 03.01.2013 6,49,997/- 5.5 I also confirm the Interest under Section 11AB/11AA of the Act as applicable and same 5.6 I impose the penalty of Rs. 5,00,000 ( Five Lakhs) for under Rule 25 of the Central Excise Rules, 2002." The appellant being aggrieved with the above order-in-original have appealed against t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctory premises. The plea of ignorance of law also cannot come to their rescue as they were already engaged in the manufacture of Oxygen, Nitrogen and other gases classifiable under Chapter 28 of the CETA. They very well knew that their activities resulted in the manufacture of new/different grades of Helium gas but still did not disclose the facts to the department. Therefore, the extended period of limitation has been rightly invoked against them." 4. Against the above mentioned impugned order-in-appeal the present five appeals have been filed by the appellants which includes the appeal of the department against remand order given by learned Commissioner (Appeals) for deciding the matter of the related party as required under Section 4 of the Central Excise Act, 1944 after verification of necessary details as mentioned in the foregoing paras. 5. Learned Advocate appearing for the petitioners has contended that learned Commissioner (Appeals) in his impugned order-in-appeal has decided the matter on the basis of Hon'ble Supreme Court decision in the case of M/s. Air Liquid North India Pvt. Limited vs. CCE, Jaipur reported in 2011 (271) ELT 321 (SC). It has been the contention of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation) Rules, 2000. 9. As regards the dutiability of the purified/ graded Hydrogen gas prior to April 2008, the matter has been decided by Hon'ble Supreme Court in the appellant's own case reported in 2017 (346) ELT 161 (SC). The relevant extract is reproduced hereunder:- "13. The decision of the Tribunal in Goyal Gases (P) Ltd. (supra) to the effect that such activity (mixing of gases) did not amount to manufacture has been affirmed by this Court by its order dated 3-4-2000 reported in Commissioner of Central Excise v. Goyal Gases (P) Ltd. - 2000 (119) E.L.T. 5 (S.C.) which is in the following terms :- "The Tribunal has categorically held that no evidence was led by the Department to controvert the assessee's case that no new product with distinct usage and marketability had been produced. Even so, it is contended that the Tribunal failed to appreciate that by the mixing of four more gases a totally different product with distinct use and marketability was produced. We find, having heard the learned Additional Solicitor General, that there is, in fact, no evidence led by the Department to establish that case. The reliance upon the order of the Commissioner would appear to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly conclusion from the above is that the tests and the "process" conducted by the appellant would amount to "treatment' in terms of Chapter Note 10 of Chapter 28 of the Tariff Act of the Act. The fact that the gas was not sold as such is further established from the fact that the gas, after the tests and treatment, was sold at a profit of 40% to 60%. if it was really being sold as such, then the customers of the appellants could have purchased the same from the appellant's suppliers. When this question was put to the officer of the appellant, he could not offer any cogent answer but merely stated that it was the customers' preference. Further, he did not give proper answer as to how the profit margin was so high. The appellant had supplied the gas not as such and the under the grade and style of the original manufacturer but under its own grade and standard. Further, while selling the gas, different cylinders were given separate certificates with regard to the pressure, moisture, purification and quality of the gas. This explains the high price at which the appellant was selling the gas. Therefore, in our opinion, the Tribunal has rightly observed that if no treatment was given to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the grounds of rejecting the refund claims are not valid as per law and vague. The adjudicating authority has rejected the refund claim for sake of rejecting the refund claim. The adjudicating authority should have passed a well reasoned order stating the grounds of rejection and also not accepting the pleas of the appellant. I find that the impugned order has been passed without justification and reasoning. I find that the impugned order is not well reasoned. The adjudicating authority also not discussed in length the evidences submitted by the appellant in their defense in his impugned order. Therefore in the interest of justice, I am of the considered view that the impugned OIO was passed in haste without examining the documentary evidences in depth and on merit. I find that the matter is required to be remanded back to the adjudicating authority for fresh decision after taking into account all the aspects of the case and documents available in the file and providing opportunity of natural justice to the appellant by granting personal hearing to the appellant." Since the matter has already been remanded back by the Commissioner (Appeals) to the original adjudicating ..... X X X X Extracts X X X X X X X X Extracts X X X X
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