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M/s. Merind Ltd. Versus Commissioner of Central Excise, Mumbai-III

2016 (5) TMI 992 - CESTAT MUMBAI

Extended period of limitation - Demand of consequential duty and imposition of penalty - Denial of discount - Non-compliance of prescribed condition of Notification No. 245/83 - Appellant while claiming the discount of the price list have withheld vital information in as much as they have not submitted the documents showing the medicines has been specified in the DPCO 1987 and not declared at the footnote of the price list that the medicines figured in DPCO - Held that:- Member (J) found that th .....

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assertion made on the price list submitted to revenue under Central Excise Law amounts to mis-declaration with intent to fraudulently avail the exemption. Therefore, the extended period of limitation has been rightly invoked. - Difference of opinion - The Registry is directed to put up the file before the Hon'ble President to resolve the issue, by reference to a third Member. - E/462/05-Mum & E/CO/200/05 - A/87623/16/EB - Dated:- 12-5-2016 - MR. RAMESH NAIR, MEMBER (JUDICIAL) AND MR. RAJU, M .....

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ure of P&P medicines falling under Chapter 30 of Central Excise Tariff Act, 1985 and availed 15% discount on Maximum Retail Price in terms of Notification No. 245/83 dated 13-09-1983. They had filed, at relevant period, price list from time to time from August 1991 in respect of their final product. In the price lists, they claimed 15% discount on MRP to arrive at the assessable value under Section 4 of Central Excise and Salt Act, 1944. As per the condition of the Notification, the retail p .....

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of the Notification No. 245/83, therefore not eligible for this discount. In the adjudication order, the Addl. Commissioner accepting with the allegations, denied the discount and confirmed the consequential duty demand of ₹ 49,81,952/- and also imposed the penalty of equal amount without quoting any statuary provision for penalty. Aggrieved by the said Order-in-Original dated 30-08-2004, the appellant filed an appeal before the Commissioner (Appeals), who rejected the appeal vide the impu .....

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fied under Drug (Price Control) Order, 1987. These price lists were approved by the competent authority of the department and no objection was raised on any issue either on the fact of price specified under DPCO or claim of discount of 15% under Notification No. 245/83 at the time of approval of the price list, therefore entire show cause notice which was issued after the normal period on limitation is time bar. He further submits that Ld. Commissioner has placed reliance on the judgment of Easl .....

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very old case, the said documents could not be traced out, hence unable to submit. 4. On the other hand Shri H.M. Dixit, Ld. Asstt. Commissioner (AR) appearing on behalf of the Revenue reiterates the findings of the impugned order. He submits that as per the Notification No. 245/83, discount of 15% can only be allowed if the MRP is specified in the price list referred to in the DPCO 1987. The appellant have not shown at any stage that the maximum retail price declared in the price list submitte .....

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87, it shows that price declared in the price list is DPCO price. We find that the departmental authority have been approving the price list from time to time, despite knowing that, the appellant have shown DPCO prices in the price list and claimed the discount of 15% in terms of Notification No. 245/83. If at all the authority has any doubt regarding the DPCO price, nothing prevented the department to call for necessary documents before approval of the price list. In the notification, there is .....

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As per our above discussion, we do not find any suppression of fact, therefore it was only normal period of one year available to the department to re-open the approval of price list which the department failed to do so and therefore entire demand raised for the extended period is time barred. The Ld. Commissioner for invoking the extended period only placed reliance on the judgment of Hon ble Supreme Court in the case of Easland Combines (supra). On the careful reading of judgment, we find tha .....

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we find that the demand is not sustainable being time barred. The impugned order is set aside and the appeal is allowed. ORDER PER : RAJU MEMBER (TECHNICAL) 7.1 After having gone through the order proposed by the learned Brother, I proceed to record a separate order. As already formulated by learned Brother, the only legal issue involved in the present appeal is as to whether extended period of limitation can be invoked in the circumstances of this case. I find that appellant had claimed the be .....

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he appellants have failed to produce evidence to prove that their prices were approved under DPCO 1987. They have failed not only to produce such evidence not only before the lower authorities but also before the tribunal, claiming that it is old matter. I find that the demand pertains to the period 1991 to 1994 and the notice was issued in 1996. The appellants have not produced the evidence of approval under DPCO in 1996 or anytime thereafter. The reason given by the appellant that the matter i .....

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prices are covered by the DPCO 1987 then they should be able to give evidence. The Section 106 of the Evidence Act states as follows 106. Burden of proving fact especially within knowledge When any fact is especially within the knowledge of any person, the burden of proving that fact is upon him. Illustrations (a) when a person does an act with some intention other than that which the character and circumstances of the act suggest, the burden of proving that intention is upon him. (b) A is char .....

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approved under DPCO 1987. In absence of evidence to substantiate the claim that the prices are approved under DPCO, the assertion made on the price list submitted to revenue under Central Excise Law amounts to mis-declaration with intent to fraudulently avail the exemption. The only conclusion that can be derived from these facts is that they had made a wrong and fraudulent claim at the time of approval of Price List under Central Excise Law. Approval of price list by Central Excise authorities .....

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