Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

M/s Sri Vasavi Polymers Pvt. Ltd. Versus CCE & ST Visakhapatnam-II

Period of limitation - Demand alongwith interest and penalty - evasion of Central excise duty - clearance of superior branded PVC pipes (Sri Vasavi brand) in the guise of inferior brand (Sri Devi brand) to their marketing agency - apparent inter relationship between VPPL and SVA - adoption of incorrect assessable value - Order-in-Original dated 22.02.2005 and Order-in-Original dated 20.04.2006 both relate to SCNs for overlapping period and listing out same set of facts and circumstances - Order- .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ds of “limitation”, we find this argument, to say the least, is frivolous. While it is settled law that subsequent SCN on identical issue to identical notice cannot invoke extended period of limitation, there is no such estoppel for issue of simultaneous or subsequent SCNs invoking extended periods, for identical noticees, even for identical periods, when the issues alleged in both SCNs are different. - Possibly because of misconception and inadequate appreciation of the two aforesaid orders .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ted in the notice. In any case the appellant has submitted that he is contesting the impugned order only on the grounds of limitation. In fact the earlier Tribunal order had set aside the impugned order on the ground of limitation and res judicata. However, based on the ROM application filed by Revenue, the Tribunal vide Misc. Order held that the impugned order had not reached finality and hence ordered recall of its earlier order. Therefore, we hold that the impugned order cannot at any stretch .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Director, there is no finding or conclusion in the order establishing his guilt in the matter. We therefore hold that the imposition of the said penalty on Shri G. Bhaskar Rao is not justifiable and requires to be set aside. - Imposition of penalty on SVA - Rule 26 of Central Excise Rules, 2002 - Held that:- appellant submitted that the penalty under Rule 26 of the CER, 2002 is not imposable on the SVA, partnership firm, since penalty envisaged in the said rule is only for individual person .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

order and further, it does not contain the premises on which revenue challenges the order - Held that:- wWe find ourselves in agreement with the contentions of the Revenue. It for a fact that there is no statutory impediment in Section 35B (1B) or for that matter in Section 35E ibid for the two Chief Commissioner members of the Committee to form opinion and issue authorization order by circulation. It is also not specifically mandated that the said committee should issue such order only after j .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ion of Central excise duty during the period July 2001 to June 2004 - adjudicating authority has discounted overall demand by 5% and accordingly demanded only an amount of ₹ 18,72,890/ apparently under the impression that the demand is based on the highest value of the highest quality brand ,namely "Sri Vasavi" - Held that:- the lower authority has arrived at this conclusion as per details in the chart extracted from the sales records and sales invoices of SVA. On the other hand the depart .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

mber (Judicial) and Shri Madhu Mohan Damodhar, Member (Technical) K.S. Ravi Shankar, Shri K. Dakshinamurthy and Shri Ashok Deshpande, Advocates for the assessee. Shri Nagendra Rao, Addl. Commissioner(AR) for the Revenue. ORDER 1. This batch of five appeals being connected, were heard together and are disposed by this common order. 1.1 Appeal E/848/2006 This appeal is filed by M/s Sri Vasavi Polymers Pvt. Ltd (hereinafter referred to as VPPL). The facts of the case are that based on intelligence .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

June 2004 along with interest thereon, and imposition of penalties. The SCN also proposed imposition of penalties under Rule 26 of the Central Excise Rules 2002 on SVA and also on Sri G. Bhaskar Rao, Managing Director of VPPL. On adjudication lower authority vide order dated 20.04.2006 confirmed demand of ₹ 18,72,890/ along with interest thereon, imposed equal penalty on VPPL and further imposed penalty under Rule 26 ibid of ₹ 50,000/ each on SVA and also on Sri G. Bhaskar. Rao. 1.2 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sed on intelligence and factory visit and further investigations it appeared to the department that VPPL and their marketing agency, SVA were under the same management, and the two units are interconnected undertakings within the meanings of section 2 (g) MRTP Act, 1969, having financial and business interest in each other, thus the assessable value to be adopted by VPPL in the case of sale to related person SVA, is the price charged by the last related person in the chain, hence VPPL has evaded .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

authority held that VPPL and SVA are not related persons and dropped the proceedings initiated vide SCN dated 25.02.2005 and also SCN for subsequent period dated 01.08.2005. Aggrieved by this order, the Department has filed this appeal. v. Appeal No. E/254/2007 This appeal has been filed by department, aggrieved by Order in Original 20.04.2006 discussed in para 1.1 supra, on the grounds that while the SCN dated 06.12.2004 proposed demand of duty of ₹ 21,35,228/ allegedly evaded during the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

not only arbitrary but also not based on facts. 6. In respect of Appeal E/848/2006, & Appeal No. E/848-A /2006, vide Final Order No. 195 & 196/2007 dated 05.02.2007, the Tribunal set aside the Order-in-original dated 20.04.2006. The relevant portion is extracted as under 4. On a careful consideration, we notice that the Commissioner was simultaneously deciding both the show cause notices. One show cause notice culminating in Order-in-Original No. 31/2005 dated 22-12-2005 has been droppe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

mands and the Commissioner accepting the party's plea. Therefore, in the impugned order taking a different view by the same Commissioner is not justified. Relevant facts of the case were within the knowledge of the department and therefore, the subsequent order on the same facts and for the overlapping period, is not justified. We are also of the considered opinion that the Order-in-Original 31/2005 dated 22-12-2005 has already decided the issue in assessee 's favour and therefore, the s .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

we set aside the impugned order and allow these appeals with consequential relief. 7. Subsequently, however on an application for rectification of mistake filed by Revenue, the Tribunal recalled it's earlier order dated 05.02.2007. The relevant portion is extracted as below: This is a ROM application filed by the Revenue for rectifying an error apparent on record in our Final Order Nos. 195 & 196/2007 dated 5-2-2007[2007 (213) 226 (Tribunal)]. Several grounds are raised in the petition. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

h 2005) and the show cause notice basic to the order-in-original No. 36/2005-06 dated 20-4-2006 had dealt with the issue of undervaluation of excisable goods involved clearing premium brands of higher value in the guise of inferior brands of lower value (period of dispute is July 2001 to June 2004). 2. Another ground raised is that the Tribunal had noted mistakenly in the Final Order that order-in-original No. 31/2005-06 dated 22-12-2005 had attained finality. This was an error since the departm .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ne through the case records. I find that the proceedings against M/s. Vasavi Polymers relate yo two issues, one relating to the undervaluation resulting from the wilful misrepresentation of the brands in the invoices at the time of removal of the pipes and the other relating to under valuation on account of sales through their sole selling agent, Vasavi Agencies, which are alleged to be covered within the definition of a 'related person ' defined in Section 4(3)(b) of the Central Excise .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ded before the time allowed under law for filing appeal before the Tribunal had not expired in respect of order-in-original No. 31/2005-06 dated 22-12-2005. We also find that an appeal filed by the Revenue against the above order is pending before the Tribunal at present. Therefore, this finding is also an error. In the circumstances, we allow this ROM application and recall the impugned order. The ROM application is disposed of. 8. Accordingly, the appeal has now once again come up before this .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

has members on different dates, and therefore done in a manner which law does not approve, being in violation of the provisions of Section 35(1B) and 35 E of Central excise Act, 1944. ii. The grounds of appeal are largely verbatim reproduction of the authorization order and further, it does not contain the premises on which revenue challenges the order. 9. In response, the Id. AR Sri Nagendra Rao contended that as per administrative exigencies and as general practice the authorization by the tw .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Chief Commissioner members of the Committee to form opinion and issue authorization order by circulation. It is also not specifically mandated that the said committee should issue such order only after jointly conferring and holding their meeting at one place and on one date/time. As regards the second ground, we find that indeed the appeal contain: 'grounds of appeal". It is upto the appellant, whether assessee or Revenue, to choose and put forth the grounds of appeal that such appella .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

5 and Order-in-Original dated 20.04.2006 both relate to SCNs for overlapping period and listing out same set of facts and circumstances. iii) Order-in-Original dated 22.12.2005, which was passed earlier by same adjudicating authority had set aside the allegations and proposals of related SCN dated 25.02.2005. iv) This being so, the same adjudicating authority is legally barred by limitation in confirming the same issue for overlapping period on SCN dated 06.12.2004, issued on identical facts and .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

one year since invocation of extended period is not justified. vii) The Ld. Counsel clarified that the appellant is prepared to pay up the demand for normal one year period with interest. 12. Countering these arguments, the Id. AR Nagendra Rao submitted that the issue in the two show cause notices are totally different; that in 2004 notice, the allegation is that VPPL had cleared superior quality/brand pipes in the guise of lower quality [brand pipes, hence resulting in undervaluation and short/ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cause both the issues, though separate, had emanated from a single search/investigation operation conducted by the department; nonetheless it cannot be said that the two SCNs are identical since after narrating the common facts and circumstances each SCN thereafter puts forth different allegations, different charging section and proposal for demand of duty etc. He further argued that in any case, the 2005 SCN was not set aside by the adjudicating authority on time bar/limitation but on merits. 1 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

. Woodmen Industries Vs. CCE [2004(164) ELT 339 (Tri.Kol.] iv. Aditya Steel Industries Vs. CCE [1996(84) ELT 229 (Tri.)] 14. In respect of Appeal No. E/ 109/2007 on behalf of Revenue, the learned AR Sri. Nagendra Rao submitted that the dropping of proceedings in related Order in original by Commissioner holding that instances of financial relationships between VPPL and SVA cannot be taken to mean mutual interest, is not legal and proper. , in the background of plethora of judgments on issue of r .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s. CCE, Ahmedabad [1995(76) ELT 616 (Tri.)] 15. He strongly contended that the judgments are overwhelmingly in favour of Revenue and are squarely applicable to the facts of the present case. On behalf of appellant, Sri. Ravi Shankar reiterated his submissions made in their cross objections No.47 /2008 and also pointed out that Rule 9 could not be applicable when sales were made to both related and unrelated person which is also the finding by adjudicating authority. In absence of relationship as .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ty was under the impression and apparently gave relief on finding that such corrections is required to be done as the demand is based on the highest value of the highest quality brand Sri Vasavi, whereas, as per the chart, there is receipt of other brands too but in minor quantity. In response the Ld Counsel for appellant reiterated his earlier objection that related Order in Original dated 22.12.2005 having been set aside the present matter should also be dropped by adjudicating authority on th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tions on identical issues for proposing demand of duty etc. It is seen that after completing aforesaid common narrative, each of these notices veer off in separate directions. The 2004 notice seeks to demand duty allegedly evaded due to clearance by VPPL of superior branded PVC pipes in the guise of inferior branded /quality pipes. The 2005 notice however seeks to demand duty allegedly evaded on account of apparent inter relationship between VPPL and SVA and adoption of incorrect assessable valu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

allegation laid out in the SCN, however discounted the overall demand by 5% and inter alia demanded duty of ₹ 18,72,890/ against ₹ 21 ,35,228/ proposed in the notice. 20. It is therefore not the case that both the notices though issued for overlapping period and alleged undervaluation involve identical issue or dispute. The 2004 notice alleges undervaluation by manipulating brand clearances at lower values, while the 2005 notice alleges undervaluation by reason of the two units alleg .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hey are clearing superior quality 'Sri Vasavi' brand of PVC pipes with higher sale price in the name of inferior branded / quality 'Sri Devi'pipes by adopting the latter's sale price for payment of duty and the sales, from their related marketing agency, are made with the actual brands and prices. Being related units, flow back of money towards the price difference between the brands (Sri Devi) for which the invoice is raised and the actual brands cleared, is in the special k .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

through the case records. I find that the proceedings against M/s. Vasavi Polymers relate to two issues, one relating to the under valuation resulting from the willful misrepresentation of the brands in the invoices at the time of removal of the pipes and the other relating to under valuation on account of sales through their sole selling agent, Vasavi Agencies, which are alleged to be covered within the definition of a 'related person' defined in Section 4(3)(b) of the Central Excise Ac .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

We find this argument, to say the least, is frivolous. While it is settled law that subsequent SCN on identical issue to identical notice cannot invoke extended period of limitation, there is no such estoppel for issue of simultaneous or subsequent SCNs invoking extended periods, for identical noticees, even for identical periods, when the issues alleged in both SCNs are different. In fact the case laws submitted by Ld Counsel to buttress his argument are with regard to issue of subsequent notic .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

2.2007, the Ld counsel had made the same albeit misconceived argument as the relevant extract of the said order as below will show: 2. It is the submission of the learned Counsel that this very issue was the subject matter of previous proceedings in Order-in-Original No. 31/2005-06 dated 22-12-2005 by which the demands have been dropped. He submits that the periods are overlapping. He produces a copy of the Order-in-Original No. 31/2005 dated 22-12-2005. Paragraphs 1 to 7 of this order is also r .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e Commissioner has accepted the transaction value and therefore, he should not have taken a different view to confirm demands in the impugned order. 23. Coming to the merits of the appeal no. 848/2006, we find that the adjudicating authority has carefully considered all the evidences that have emerged during investigation and narrated in the notice. In any case the Ld counsel has submitted that he is contesting the impugned order only on the grounds of limitation. In fact the earlier Tribunal or .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

. 24. Adverting to the department appeal No.254/2007, we are afraid we do not find much merit in the contention of the department that the reduction of demand from ₹ 21,35,228/ to ₹ 18,72,890/ is erroneous. The department has argued that the finding of lower authority that since demand has been based on highest quality brand whereas, as per records, there is receipt of other brands too, but in minor quantity and hence 5% discount of demand is to be granted is not legal and proper. We .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     Latest Happenings     ↓  

Highlight: Restriction on number of layers for certain classes of holding companies - More than two layers of subsidiaries not allowed subject to certain exceptions.

Forum: GST on RCM on rent in a unregistered state

Forum: COMPOSITION SCHEME

Forum: Input Tax Credit - Reg

Forum: GST Invoice

Article: Websites of Government Departments need lot of improvement. We are noticing detoriations in them for example, case of website of ITAT.

Highlight: Levy of additions tax u/s 115O on distribution of dividend - shares of its profits declared as distributable among the shareholders is not impressed with the character of the profit from which it reaches the hands of the shareholder - not to be bifurcated as agriculture and non-agriculture dividend - SC

Highlight: Rate of GST on old and scrap buses - 28% or 18% - at such initial tender process initiated by the Respondents-KSRTC, the present petitions filed by the petitioners are premature and misconceived and do not require any interference by this Court at this stage. - HC

Forum: Rent a cab operator

Highlight: In view of amendment made u/s 132A of the Income Tax Act, 1961 by Finance Act of 2017, the 'reason to believe' or 'reason to suspect', as the case may be, shall not be disclosed to any person or any authority or the Appellate Tribunal, SC dismissed the appeal of the assessee

Highlight: Validity of Assessment Order - period of limitation u/s 153 (2A) is applicable even if the entire order was not set aside but matter was remanded back for for limited aspects with directions - HC

News: Note ban was a shake-up, achieved its main objectives

Notification: Amendments in the notification No.5/2017- Integrated Tax (Rate) dated the 28th June, 2017.

Highlight: Levying interest u/s 234C - interest is to be charged on the returned income and not on assessed income.

Highlight: Accrual of income - sale of right to develop and sell incentive FSI under LOI - till the conditions of LOI are fulfilled transfer is not complete and income does not accrue to the assessee

Highlight: TPA - determination of ALP - TP adjustment by applying Bright Line Test (BLT) is not sustainable on protective basis having no statutory mandate.

Highlight: Safeguard Duty - Advance License Scheme - as there is no exemption from safeguard duty leviable under Section 8C, which is imposed on the goods imported from China, the importer has to pay safeguard duty

Highlight: Manufacture - process of cutting of waste plastic container - Such plastic containers before and after cutting are nothing but waste / scrap - Not a manufacturing activity as no new product emerges.

News: NITI Aayog and Govt. of Assam organizes workshop on health sector reforms in Guwahati; launches SATH- Sustainable Action for Transforming Human Capital

Notification: Seeks to amend notification no. 5/2017- central tax(rate) dated 28.06.2017 to give effect to gst council decisions regarding restriction of refund on corduroy fabrics

Notification: Seeks to amend notification no. 2/2017- central tax(rate) dated 28.06.2017 to give effect to gst council decisions regarding gst exemptions

Forum: GSTR 3B Rectification

Notification: seeks to exempt Skimmed milk powder, or concentrated milk

Notification: Seeks to amend notification no. 2/2017- integrated tax(rate) dated 28.06.2017 to give effect to GST council decisions regarding GST exemptions.

Notification: Seeks to amend notification no. 1/2017- central tax(rate) dated 28.06.2017 to give effect to gst council decisions regarding gst rates

Notification: Seeks to amend notification no. 1/2017- integrated tax(rate) dated 28.06.2017 to give effect to gst council decisions regarding gst rates.

News: Notification Issued For GST Actionable Claim On Branded Food Products

Highlight: Classification printed computer stationary/manifold Business Forms - to be classified under Chapter Heading 4820.00 or under Chapter Heading 4901.90 - items like A4 sheets, advertisement and job card to be classified under Chapter 49

Article: RCM – Applicability to persons not liable to get registered us 23(1)

Article: Credit of unsold stock [Section 140(3)] - Actual Credit as well as Notional Credit - Part-I - GST Transitional provisions

News: GST Refund - Blockage of Working Capital of Exporters - earlier also there was a normal blockage of funds for a period of 5-6 months at least

News: Clarification about Transition Credit - ₹ 1.27 lakh crore of credit of Central Excise and Service Tax was lying as closing balance as on 30th June, 2017 - claim of credit of ₹ 65,000 crore is not unexpected

Article: 20 Things You must know about E Way Bills in GST Law

Article: MISTAKES IN DRAFTING

Highlight: The Customs and Central Excise Duties Drawback Rules, 2017 and All Industry Rates (AIRs) of Drawback related changes -reg. - Circular

Highlight: The definition of "subsidiary company" or "subsidiary" u/s 2(87) of the Companies Act, 2013 shall come into force w.e.f. 20-9-2017

Highlight: Central Government notified the All Industry Rates of Duty Drawback Schedule w.e.f. 1.10.2017 - Notification

Notification: All Industry Rates of Duty Drawback Schedule w.e.f. 1.10.2017

Circular: Investment by Foreign Portfolio Investors in Corporate Debt Securities – Review

Notification: Exemptions on supply of services under UTGST Act

Notification: Rates for supply of services under UTGST Act

Notification: Exemptions on supply of services under IGST Act

Notification: Rates for supply of services under IGST Act

Notification: List of Exempted supply of services under the CGST Act

Notification: Rates for supply of services under CGST Act

Highlight: Acceptance of deposits by companies from its members - conditions relaxed in case of Specified IFSC Public company and a private company - Rule 3 amended

Notification: Rate of exchange of conversion of the foreign currency with effect from 8th September, 2017

News: Tax Payers Advised To Confirm Identities Of Income Tax Search Authorities

Notification: Amendment in Appendix 3 (SCOMET items) to Schedule- 2 of ITC (HS) Classification of Export and Import Items 2012

Notification: The Customs and Central Excise Duties Drawback Rules, 2017



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version