TMI Blog2023 (9) TMI 918X X X X Extracts X X X X X X X X Extracts X X X X ..... ARA VERSUS M/S VADILAL GASES LTD. ORS. [ 2017 (1) TMI 1311 - SUPREME COURT ] where it was held that the Tribunal has rightly observed that if no treatment was given to the gas purchased by the appellant, the customers of the appellant would not have been purchasing helium from the appellant at a price 40% to 60% above the price at which the appellant was purchasing. The issue regarding determining whether the related party transaction exist in this case or not, as per Section 4(1) (b) of Central Excise Act, 1944 read with Rule 9 of Central Excise (Valuation) Rules, 2000 is concerned, since the matter has already been remanded back to the original adjudicating authority by impugned order-in-appeal dated 31.03.2015, the Adjudicating Authority while deciding related party issue should also re-adjudicate the matter of dutiability of the purified/ graded Hydrogen gas as per the Hon ble Supreme Court decision in the appellant s own case COMMISSIONER OF CENTRAL EXCISE, VADODARA VERSUS M/S VADILAL GASES LTD. ORS. [ 2017 (1) TMI 1311 - SUPREME COURT ]. Since the matter has already been remanded back by the Commissioner (Appeals) to the original adjudicating authority and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithout discharging Central Excise duty. The department is of the view that process of commercial grade hydrogen gas for purification, grading and labeling amounts to manufacture and therefore, the appellant namely M/s. Vadilal Gases Limited should have discharged Central Excise duty amounting to Rs. 23,76,942/-. Penal provisions under Rule 25 of Central Excise Rules, have also been invoked against M/s. Vadilal Chemicals Limited and penal provisions under Rule 26 of Central Excise Rules, 2002 has also been invoked against Shri Virendra Ramchandra Gandhi, Manager of M/s. Vadilal Gases Limited and Managing Director of M/s. Vadilal Chemicals Limited. 3. It is relevant to mention that the impugned show cause notice dated 08.06.2011 also mentions that transaction between M/s. Vadilal Gases Limited and M/s. Vadilal Chemicals Limited amounts to related party transaction as per provisions of Section 4 of Central Excise Act, 1944 and therefore, the value of goods needs to be guided by Central Excise Rules, and Rule 9 of Central Excise (Valuation) Rules, 2000. It has been contention of the Revenue that the value for the purpose of Central Excise duty, should have been the value of clearanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise duty amounting to Rs.23,76,942/- not paid on the clearances of purified graded hydrogen under Section 11A (2) of the Act and the same should be recovered from them. (i) I also impose mandatory penalty of Rs. 23,76,9421/- on them under Sec. 11 AC of the Act and Rule 25 of the Central Excise Rules in view of their willful evasion of Central Excise duties. If the duty along with interest and 25% of the imposed penalty is paid within 30 days of the receipt of this order, penalty get reduced to 25% of the imposed penalty. (iii) I also confirm the Interest under Section 11AB of the Act should not be charged and recovered from them. 5.2 I also impose Penalty of Rs. 100000/- (one lakh only) on Vadilal Chemicals Ltd. under Rule 25 of Central Excise Rules, 2002. 5.3 I also impose Penalty of Rs, 100000/- (one lakh only) on Shri Virendra Ramachandra Gandhi, Chairman and Managing Director of M/s Vadilal Gas Ltd. and M.D. of M/s Vadital Chemicals 5.4 I also confirm Central Excise duty amounting to as mentioned below in the table for the relevant period under section 11A (10) (Erst while Section 11A (2)) of the Act as applicable and the same should be recovered from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, if necessary after giving the appellant an opportunity to be heard in person. The adjudicating authority will examine the matter in the limited scope of cum-duty price and calculations, which are to be submitted by the appellant before the adjudicating authority within one month of receipt of this order, and pass a speaking order on this portion alone. 10. Now, I take up the plea of the appellant regarding limitation. Again I find the order of the Supreme Court in case of Air Liquid North India Pvt Limited vs. CCE, Jaipur-l as refered in para supra, which held as under: 11. The ld Counsel has also raised the issue of limitation by contending that the demand is time-barred as the demand period ranges from 1998-1999 to 2000-2001 whereas the show cause notice was served on the respondents on 5- 7-2002. But this contention of the ld. Counsel cannot be accepted as there was suppression of facts by the respondents from the department. They never disclosed the details of the activities being curried out by them in respect of purchased Helium gas cylinders from the market. No duty was ever paid by them since December, 1998 when the first clearance of the Helium gas was made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner (Appeals) for adjudication of het issue relating to related party transaction as per the provisions of Section 4 of Central Excise Act, 1944 read with Rule 9 of Central Excise (Valuation) Rules, 2000. It is being argued that it is settled law in view of the Hon ble Supreme Court decision in the case of MIL India Limited vs. CCE, Noida reported in 2007 (210) ELT 188 (S.C.) that Commissioner (Appeals) has the powers to remand back the matter for fresh adjudication and therefore the appeal filed by the department does not hold ground and need to be dismissed. 7. We have also heard Shri G. Kirupanandan, learned Assistant Commissioner (AR) who reiterated the findings given in order-in-original and order-in-appeal. 8. After hearing both the sides we find that the only question which needs to be answered by us in this matter is whether; (i) Central Excise duty is liable on purified/ graded Hydrogen gas supplied by M/s. Vadilal Gases Limited to M/s. Vadilal Chemicals Limited prior to 01.03.2008; and (ii) M/s. Vadilal Gases Limited and M/s. Vadilal Chemicals Limited are related parties in terms of provisions of Section 4(1) of Central Excise Act, 1944 read with Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s recorded by the learned Commissioner with regard to the manufacturing process and the data laid before us as well as the ratio of decision in Goyal Gases (P) Ltd. (supra), a view can be taken that the second part of the requirement stipulated by Note 10 of Chapter 28 of the Tariff Act is attracted in the present case and any new marketable product/item comes in existence by the process of mixture of gases in question. 16. The reliance placed by the appellant-Revenue on the decision of this Court in Air Liquide North India Private Limited v. Commissioner of Central Excise - (2011) 15 SCC 264 = 2011 (271) E.L.T. 321 (S.C.) does not assist the Revenue in any manner. In the said case, neither the adjudicating authority nor this Court had the benefit of the details of the manufacturing process inasmuch as the same was kept away from the Court by the assessee by contending the same to be a trade-secret . In these circumstances, this Court in coming to its conclusion that the process deployed amounted to manufacture within the meaning of Note 10 of Chapter 28 of the Tariff Act relied on certain other features of the case, details of which have been set out in Para 16 of the judg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tral Excise (Valuation) Rules, 2000 is concerned, since the matter has already been remanded back to the original adjudicating authority by impugned order-in-appeal dated 31.03.2015, we are of the view that Adjudicating Authority while deciding related party issue should also re-adjudicate the matter of dutiability of the purified/ graded Hydrogen gas as per the Hon ble Supreme Court decision in the appellant s own case reported in 2017 (346) ELT 161 (SC). 11. So far as the Appeal No. E/11402/2014-DB of M/s. Vadilal Chemicals Limited is concerned, the appellant sought refund of Rs. 15 Lakh which was deposited by them during the course of investigations. The main ground of the appellant is that in the impugned order-in-original only penalty of Rs. One Lakh has been imposed on the appellant and therefore, the amount deposited by them during the course of investigation should have been sanctioned by the Assistant Commissioner who has rejected their refund claim on the ground that at the time of filing of refund claim, the show cause notice was pending adjudication. We find that learned Commissioner (Appeals) in his order dated 26.03.2013 has considered the appeal of M/s. Vadilal Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X
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