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COMMISSIONER OF CENTRAL EXCISE Versus M/s GILLETTE DIVERSIFIED OPERATIONS LTD. & ORS.

2015 (12) TMI 1160 - SUPREME COURT

Undervaluation of goods - Demand of differential duty - Evasion of duty - The case set up in the Show Cause Notice was that at the relevant time, manufacturing of electric hair removers and dyers was reserved for SSI unit, hence, Gillette could not have directly manufactured the said goods. Therefore, in connivance with Braun, which is a group company of Gillette and Rialto, it got the same manufactured in the premises of Rialto.

Held that:- Evidence which was produced and relied upon .....

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Findings which are returned by the CESTAT in this behalf included finding that Rialto and Gillette are separate and independent Companies with separate juristic personality; Rialto manufactured the goods and supplied the same to Gillette on payment of duty of excise under statutory invoices; in the Show Cause Notice, the Department did not raise any objection with regard to these returns; the goods were not manufactured by Rialto out of raw materials procured by themselves; the capital go .....

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. Yashank Adhyaru, Sr. Adv., Mr. P. K. Mullick, Adv., Ms. Rashmi Malhotra, Adv., Mr. Ravi Shankar Verma, Adv., Mr. Pankaj Pandey, Adv. And Mr. B. Krishna Prasad, Adv. For the Respondent : Mr. Kavin Gulati, Sr. Adv., Ms. Anisha Mitra, Adv., Ms. Ruby Singh Ahuja, Adv., Ms. Deepti Sarin, Adv., Ms. Eesha Mohapatra, Adv. And Mrs. Manik Karanjawala, Adv. ORDER The period involved in the present appeals for which the purported differential duty is demanded is August, 1996 to May, 1998. It so happened t .....

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dustrial unit (SSI unit) and in order to undertake this job, Rialto needed requisite machinery that was leased to it by M/s. Braun India Pvt. Limited (hereinafter referred to as 'Braun'). It is not in dispute that Rialto had been paying excise duty on the goods manufactured and cleared by it which were supplied to Gillette. A show cause notice dated 31.08.2001 was issued by the Revenue/Appellant to Gillette alleging therein that it had connived with Rialto for evading central excise duty .....

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e in order to facilitate the aforesaid operations and pay the excise duty at a much lesser rate inasmuch as after getting those goods manufactured from Rialto, Gillette was selling these goods in the market at a much higher rate. To buttress the stand taken in the Show Cause Notice that Rialto was a shadow company, following facts were stated in the Show Cause Notice: - (i) Machinery worth crores of rupees was supplied by M/s. Braun India Ltd. to M/s. Rialto Enterprises (P) Ltd. on lease. (ii) M .....

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spondent at a much higher price as second sale, thus, evading central excise duty running into crores of rupees. Gillette filed reply to the Show Cause Notice denying the aforesaid allegations. It was claimed that Rialto was an independent entity as it was a company incorporated under the Indian Companies Act with different shareholders and Directors who had no connection with Gillette. It was also stated that the contract entered into between the parties was of manufacture and purchase of goods .....

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entered into between GDOPL and Rialto on a principal to principal basis. d) All components and raw materials were procured by Rialto. Moulding of some components was also done by Rialto through third parties. e) Factory land and buildings used by Rialto was on lease from Rayala (A Rialto Group Company). Both Gillette and Rialto, thus, denied all the allegations in the Show Cause Notice. The said Show Cause Notice was adjudicated upon by the Commissioner of Central Excise, Chennai, who confirmed .....

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