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TMI Blog2018 (4) TMI 1314X X X X Extracts X X X X X X X X Extracts X X X X ..... were manufacturers of P or P medicaments and were availing SSI exemption. Acting on intelligence, department officers conducted search and investigations in various premises of the manufacturer's unit of respondent-1, the residence of Shri C.C. Kesava Rao, Managing Director (respondent-2 in Appeal No.E/484/2008) and Shri G.N.C Prasad, Proprietor of Subash International (respondent-3 in Appeal No.E/485/2008)) and Shri Ch. Ashok Kumar, Proprietor of Sterling Health Care (respondent-4 in Appeal No.E/486/2008). From the investigations, it appeared that Fizikem had commenced production of goods w.e.f. 07.12.98; that Shri C.C.Kesava Rao is the Managing Director and Sri Sudheer s/o of Kesava Rao is the Director; that factory premises and the produ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e purpose of Section 4 of the Act; that as per Section 4 (1) (a) (iii) valid upto 30.06.2000, the normal price of the goods shall be deemed to be the price at which the goods are sold by the related person during the course of wholesale trade. Department adopted the sale price of the goods when sold by respondent-4 as the basis for the purposes of assessable value and took the view that value of clearances of Fizikem had crossed Rs. 300 lakhs during 2001-02; hence they are not eligible for availing exemption during 2002-03; that as the value of clearances in the related preceding financial years had exceeded the SSI limit, they are not eligible for duty exemption in the immediately following financial years. It therefore appeared to the dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enalty of Rs. 46,32,765/- under Section 11AC of the Act on Fizikem (Respondent-1) in respect of proceedings initiated in SCN No.37/2002 dt. 13.3.2002 (ii) Penalty of Rs. 15 lakhs under Rule 25 of the Central Excise Rules, 2002 on Fizikem (Respondent-1) (iii) Penalty of Rs. 10 lakhs on Shri C.C. Kesava Rao, M.D. of Fizikem (Respondent-2) under Rule 26 of the Rules. (iv) Penalty of Rs. 5 lakhs on G.N.C Prasad of Subhash International (Respondent-3) under Rule 26 ibid. (v) Penalty of Rs. 5 lakhs Ch. Ashok Kumar of Sterling Health Care (Respondent-4) under Rule 26 ibid. On appeal, the Commissioner (Appeals) vide order No.01/08 (G) CE to 04/08 (G) CE DT. 10.01.2008 (impugned order) set aside the order of the original authority and allowed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be covered by Rule 6 of the Valuation Rules, 2000 w.e.f. 1.7.2000. The Revenue subsequently filed supplementary appeals E/483-486/2008 in respect of each of the respondents as required by procedure. The delay in filing supplementary appeals was condoned and they were ordered to be taken on record vide Misc Order No.634/2009 dt. 23.11.2009 of CESTAT Bangalore. 3. On 1.2.2018, when the matter came up for hearing, on behalf of Revenue, ld. A.R Shri Deepak Bhagath reiterated the grounds of appeal. 4. None appeared on behalf of the respondents. However, from the records, it is seen that they had submitted brief submissions on 04.07.2008 wherein it is inter alia, submitted that there is no clinching evidence to allege that the said three distr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts. We also find that the lower appellate authority is correct in concluding that there is no corroborative evidence to substantiate the allegation that advertising charges are borne by respondents 3 & 4 on behalf of Fizikem. We therefore are not able to find any infirmity with the following findings of the lower appellate authority : "9) Further, the allegation that the advertisement charges are born by M/s.Sterling Remedies and M/s.Sterling Health Care on behalf of the appellants company by oral agreement appears to be not correct as there is no corroborative evidence is produced by the department to prove the same. Upon perusal of the letter dated 10.7.2002 addressed to the concerned authorities by Shri C.C.Kesava Rao, and relies of C.V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd any corroborative evidence to establish that Shri CH.Ashok Kumar, proprietor of M/s.Sterling Health Care is related to Shri .C.Kesava Rao and the expenses were born by them on behalf of M/s.Fizikem Laboratories (P) Ltd. ..... .... ..... I find that the all the case laws are squarely applicable to the present case. In the present case, I find that the expenses met by the distributors of the appellant company, are, on their own freewill without any written agreement with an enforcement clause to enforce legal right to insist on advertisement under agreement. In the absence of such agreements between the appellant company and their distributors, it is against the principal of natural justice to uphold the department's allegation. Accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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