TMI Blog1999 (8) TMI 917X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise, Delhi-I. 2. By the impugned order, the Commissioner confirmed demand of duty amounting to Rs. 65,72,168. He also imposed a penalty of an equal amount under Section 11AC of the Central Excise Act read with Rule 173Q of the Central Excise Rules, 1944. Interest as provided by Section 11AB of the Act has also been levied. Penalty of Rs. 5 lacs has been imposed on a direction of the manufacturer company. Penalty amounting to Rs. 3,00,000 and Rs. 2,00,000 were also imposed on two employees of M/s. Ranbaxy Laboratories Ltd. 3. The dispute in these cases relates to the period 25-3-1994 to 7-7-1997. The short facts in relation to the dispute in these appeals are as follows : Appellant company M/s. Oscar Pharmaceuticals Pvt. Ltd. (for sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... verting to the above facts and proposing demand of differential duty on the higher assessable value and also proposing imposition of penalty on Oscar and Ranbaxy . Commissioner confirmed the demand and imposed penalties on the appellants before us but exonerated Ranbaxy from any kind of liability. 4. Learned Counsel representing the appellant contended that Oscar had declared correct assessable value of the medicine manufactured by them and paid duty accordingly. The price paid by Oscar for Enrofloxacin was the correct negotiated value of the raw material. No inference could be drawn against Oscar from the circumstances that Ranbaxy had hoped to sell the raw material at Rs. 10,000 per Kg. Ranbaxy had to negotiate with Oscar for the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the appellants further contended that the Commissioner was clearly in error in pressing into service the provisions of Sections 11AB and 11AC of the Act in relation to transactions which took place prior to enactment of these provisions. 7. Lastly it was contended by the learned Counsel representing the appellants that the Commissioner was clearly in error in finding the appellants guilty of collusion in evading central excise duty when Ranbaxy was found to have had no knowledge of any collusion as alleged in the show cause notice. 8. We have heard arguments advanced by the learned Counsel representing the appellants and the learned Departmental Representative and perused the records. We are disposing of these appeals by a common orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ser price to other manufacturers of Enrocin. Vorin Laboratories had sold Enrofloxacin to Ranbaxy also at Rs. 6,700 per Kg. On 9-7-1997 Vorin Laboratories supplied the same material at a price of Rs. 2,900 per Kg. There is material to show that Ranbaxy used to export Enrofloxacin at the rate of Rs. 6,000 per Kg. When the evidence before the Commissioner clearly showed that raw material Enrofloxacin was being sold in open market by its manufacturers at the rate of Rs. 6,000 per Kg. he was not correct in coming to the conclusion that the value shown sale by Ranbaxy at Rs. 10,000 per Kg was its correct sale price. Excise duty on the value of Enrofloxacin at the price of Rs. 10,000 per Kg was paid by Ranbaxy . When the goods were purchased by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asis of the value at which Oscar was purchasing raw material Modvat credit was claimed. Those invoices were defaced by the officers of the Central Excise regularly by affixing seal showing Modvat availed . Invoices in relation to the period in dispute are among the records. They go to show that all the details regarding the impugned transaction including value of Enrofloxacin were made known to the Department. There was no concealment of any material. Accordingly we are not in a position to find any fraud, collusion, wilful mis-statement or suppression of facts as required by the proviso to Section 11A by the appellants. Consequently, the action initiated by the Commissioner against the appellants is barred by limitation and no demand can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the parties especially the invoices filed under Rule 57G claiming Modvat. 12. Clause (2) of Section 11AB of the Central Excise Act reads - For the removal of doubts; it is hereby declared that the provisions of subsection (1) shall not apply to cases where the duty became payable before the date on which the Finance (No. 2) Bill, 1996 received the assent of the President . As stated earlier, the period with which the impugned order relates is 25-3-1994 to 7-7-1997. Presidential assent was given to Finance (No. 2) Bill, 1996 on 28-9-1996. The provision contained in Section 11AB cannot be in relation to duty which became payable before 28-9-1996. The plea based on the proviso to Section 11AB of the Act was dealt with by the Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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