9911796707
TMI Blog2000 (1) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Superintendent, Central Excise Range Panipat for recovery of the said duty amount of Rs. 19,29,642/-. The petitioner seeks a direction to the Commissioner Central Excise the designated authority under the KVSS to consider the said declaration and restrain the Superintendent from proceeding further in the matter of recovery. 3.The petitioner, an incorporated company, is engaged in the manufacture of P.P. Ayurvedic Medicines falling under Chapter Heading No. 3003.30 of the Central Excise Tariff Act, 1985. They were clearing the physicians samples of the said ayurvedic medicines on payment of duty at the assessable value equivalent to the cost price. The Central Excise Department disputed the basis adopted by the petitioner for determining the assessable value equivalent to the cost of production. Accordingly vide letter dated 26th July, 1995 the Superintendent, Central Excise, Panipat respondent No. 5 herein, directed the petitioner to clear the samples by adopting a higher assessable value on pro rata basis of the assessable value of the regular trade packs sold commercially, with a further direction to execute B-13 bonds for provisional assessments to be made in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s by the petitioner was pending adjudication by the Revenue authorities in pursuance of the aforenoted two show cause notices, covering the period from January 1995 to August 1995 all future similar clearances were being assessed as provisional, subject to the outcome of the said show cause notices the said dispute for the period from January 1995 to August 1995 was finally adjudicated by the Assistant Commissioner only on 16th March 1998; making a pointed reference to the two show cause notices and relying on the said adjudication order, the Assistant Commissioner finalized the assessment for the period in question, namely from 1st September 1995 to 31st January 1998 vide his order dated 17th September 1998; the differential duty, quantified at Rs. 19,29 642/- required to be paid by the petitioner, over and above the duty paid by virtue of provisional assessment, constitutes the subject-matter of demand in the form of provisional assessments, made prior to 31st March 1998, and remained unpaid and was thus "tax arrears" within the meaning of Section 87(m)(ii) of the Finance (No. 2) Act, 1998 (for short "the Finance Act"). 6.The Petitioner filed an appeal against the order dated 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v Rao, learned counsel for the petitioner and Mr. U. Hazarika, Central Government Standing Counsel on behalf of the respondents. 9.It is submitted by Mr. Rao that though no separate show cause notice was issued to the petitioner for the additional demand pertaining to the period from 1st September 1995 to 31st January 1998 but the provisional assessments for this subsequent period on the basis of RT-12 returns were being made only because of pendency of dispute with regard to the assessable value of the physicians samples of P.P. Ayurvedic Medicines, subject-matter of show cause notices dated 28th July 1995 and 25th October 1995 and it was only after the final adjudication of the said show cause on 16th March 1998 that final differential amount due and payable for the period in question was determined on 17th September 1998, by following the adjudication order dated 16th March 1998, and therefore it could not be said that the subject demand did not remain unpaid before 31st March 1998 as stipulated in Section 87(m)(ii) of the Finance Act. In support of his argument that the petitioner was contesting the demand of Rs. 19,29,642/- it is pointed out that an appeal against the said o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the duties on such seized goods where such duties on the seized goods have not been quantified. Explanation :- Where a declarant had already paid either voluntarily or under protest, any amount of duties, cesses, interest, fine or penalty specified in this sub-clause on or before the date of making a declaration by him under section 88 which includes any deposit made by him pending any appeal or in pursuance of a court order in relation to such duties, cesses interest, fine or penalty such payment shall not be deemed to be the amount unpaid for the purpose of determining tax arrears under this sub-clause". 11.Thus "tax arrears" in case of indirect tax enactment includes (i) Duties (including drawbacks of duty, credit of duty or any amount representing duty), cesses, interest, fine or penalty determined as due or payable under that enactment as on 31st March 1998; but remaining unpaid on the date of declaration or (ii) the amount of duties etc. referred above in (i) as per a demand notice or show cause notice, which is issued on or before 31st March 1998 and remaining unpaid on the date of declaration. 12.Therefore, the basic and crucial requirement to fall within the ambit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner. "The clearances were made provisional w.e.f. 1-9-95 Show Cause Notices No. V(39)300-127/94/9668, dated 29-9-94, No. V(40)30/343/95/2335, dated 28-7-96 No. Ce-20/Demand/Charak/PNP/95/10473, dated 24-10-96 were issued which dealt with issue of valuation of physicians samples. The subject S.C.Ns. have since been adjudicated by the Dy. Commissioner vide O-in-O No. 2/98, dated 19-2-98 and 209/97, dated 16-3-98 issued vide C. No. V(30)15/70-C.E./96/226, dated 19-2-98 and C. No. V(40)30/343/952335 and it has been decided that assessable value of physicians samples has to be on pro rata basis and not the cost price as contended by the party. In accordance with the above order-in-original, I order that the assessment if the subject samples should be made on pro rata basis for the period 1-9-95 to 31-1-1998. Since the differential duty amounting to Rs. 19,29,642/- on physicians samples has been worked out by the Range Office, Panipat, after adjusting the duty provisional assessed against the duty finally assessed which is recoverable from the party as differential duty as detailed in the Annexure 'A' attached. Hence I order for the final assessment of the said provisional assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for which the petitioner had filed RT-12 returns for whatever reason were provisional for all intents and purposes and the issue in dispute was alive till final assessment in respect of the said period, as required to be made under Rule 173-I was made on 17th September 1998. The mere fact that order dated 17th September 1998 was passed without any fresh show cause notice to the petitioner amply lends support to the stand of the petitioner that the letter issued on 26th July 1995, by respondent No. 5 (Superintendent, Central Excise, Range Panipat) directing the Petitioner to pay duty on samples on the value thereof on pro rata basis on the assessable value of regular trade packs which were being sold commercially with immediate effect was in fact in the nature of a show cause notice as postulated in Section 87(m)(ii)(b) of the Finance Act in respect of all the clearances, including the period in question namely from 1st September 1995 to 31st January 1998. Admittedly the differential duty amounting to Rs. 19,29,642/- for the said period was assessed finally vide order dated 17th September 1998, and it remained unpaid on the date of making the declaration. 17.We are therefore of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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