M\/s Elegant Chemicals Enterprises Pvt Ltd., M\/s Procter & Gamble Hygiene & Health Care Pvt Ltd. Versus CC, CE & ST, Secunderabad \u2013 GST, Hyderabad – III
Central Excise
2019 (3) TMI 516 – CESTAT HYDERABAD – TMI
CESTAT HYDERABAD – AT
Dated:- 6-3-2019
Appeal No: E\/574 & 575\/2010 – A\/30310-30311\/2019
Central Excise
Mr. M.V. RAVINDRAN, MEMBER (JUDICIAL) And Mr. P.V. SUBBA RAO, MEMBER (TECHNICAL)
\nShri Vipin Verma, Advocate for the Appellant(s).
\nMs. B.V. Siva Naga Kumari & Shri Bhanu Kiran (ARs) for the Respondent.
\nORDER
\nPer: M.V. Ravindran
\n1. These two appeals are directed against Order-in-Original No.19\/2009-CE-Commr-HYD III\/ADJN dated 11-12-2009. Since both the appeals are interconnected they are being disposed of by a common order.
\n2. The relevant facts that arise for consideration after filtering out unnecessary details are appellant (M\/s Elegant Chemicals Enterprises Pvt Ltd.,) is engaged in the manufacture of Vicks Action 500 tablets and Vicks Inhaler as<\/p>\n
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Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n or discharging the central excise duty. Appellant did not agree with the contentions raised hence a show cause notice dated 03-08-2009 was issued for demand of the duty for the period 2004-05 to 2007-08, demanding interest and also seeking to impose equivalent penalty on the appellant and penalty on appellant no.2. Both the appellants contested the show cause notice on merits as well as on limitation. The adjudicating authority after following due process of law, confirmed the demands raised with interest and also imposed penalties on both the appellants. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n on method prescribed under Ujagar Prints case was followed no dispute can be raised. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n of trade mark is not includable in the value when the goods are manufactured under job work basis. He would submit that the entire demand is barred by limitation in as much, the job work arrangement between appellant and appellant no.2 is within the knowledge of department since 1999, as a valuation dispute itself was raised on the goods manufactured on job work basis; there were regular audits conducted by the departmental authorities and C & AG department wherein job work agreement, manner of valuation of goods, has been examined and no demands were raised. It is his submission that for the period April 2003 – March 2007, proceedings were initiated against the appellant and method valuation adopted for job work manufactured goods is on record the copy of the Order-in-Original dropping demand is enclosed along with the appeal memoranda, and the said order is not contested by the Revenue. It is his further submission that as an alternative, the calculation of the demands is also incor<\/p>\n = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n limitation as well as on merits, imposition of penalties on appellant and appellant no. 2 does not arise. He prays for setting aside the impugned order. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ing authority in the case as discussed each and every aspect which were argued by the assessee more specifically regarding periodical submission of cost sheets with the authorities, method in which cost of production was arrived as per manufacturing agreement between appellant and appellant no. 2 was also considered in its correct perspective and has come to a conclusion that the duty liability arises. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ot be aware as to the fact that appellant no. 2 is paying royalty or technical fee to Procter & Gamble, USA. In fact nothing is brought on record that appellant was aware of payment of royalty charges and technical fees by appellant no.2 to Procter & Gamble, USA and nor there is any allegation in the show cause notice that indicate so. In our view, in the absence of any knowledge of any payment made by appellant no. 2 to Procter & Gamble, USA, it cannot be held that appellant had misdeclared the value of the goods manufactured on job work basis. Further, in the entire proceedings, the Revenue has not disputed that appellant had been filing cost sheets along with the declaration made by appellant no.2 when they manufactured and cleared Vicks Action 500 and Vicks Inhalers from their factory premises. If that be so, alleging that there was a misdeclaration of the value in the case in hand seems to be unfounded and incorrect. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" M\/s Elegant Chemicals Enterprises Pvt Ltd., M\/s Procter & Gamble Hygiene & Health Care Pvt Ltd. Versus CC, CE & ST, Secunderabad \u2013 GST, Hyderabad – IIICentral Excise2019 (3) TMI 516 – CESTAT HYDERABAD – TMICESTAT HYDERABAD – ATDated:- 6-3-2019Appeal No: E\/574 & 575\/2010 – A\/30310-30311\/2019Central ExciseMr. M.V. RAVINDRAN, MEMBER (JUDICIAL) And Mr. P.V. SUBBA … Continue reading “M\/s Elegant Chemicals Enterprises Pvt Ltd., M\/s Procter & Gamble Hygiene & Health Care Pvt Ltd. Versus CC, CE & ST, Secunderabad \u2013 GST, Hyderabad – III”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-17251","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/17251","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=17251"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/17251\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=17251"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=17251"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=17251"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\n3. Learned Counsel submits after giving overall facet of the case submits the sequence of events which are reproduced as under:
\nDate
\nEvent
\n19.09.2005 to 22.09.2005
\nAudit conducted by C & AG
\n13.10.2006 to 18.10.2006
\nAudit conducted A.G's Audit Party
\n12.11.2007 to 15.11.2007
\nAudit conducted A.G's Audit Party
\nNovember, 2007
\nAudit by the Central Excise Audit Group
\nDecember, 2008
\nAudit by the Central Excise Audit Group
\n16.04.<\/p>\n
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\n03.08.2009
\nImpugned SCN
\n06.11.2008
\nSCN issued with a proposal to demand differential excise duty on the ground that the valuation is to be done in terms of Rule 10A of the Vauation Rules for the period April 2007 onwards.
\n30.04.2009
\nOIO passed adjudicating the SCN dated 06.11.2008 confirming the demand
\n18.12.2018
\nTribunal confirmed the OIO dated 30.04.2009 upholding the demand under Rule 10A for the period April 2007 to February 2008
\nIt is his submission that the show cause notice seeking differential duty demand for the period in question is repetitive and of periodical one as earlier as show cause notices were issued. It is his submission that the valuation method adopted by the appellant for discharge of central excise duty on the goods manufactured and cleared as job worker is in terms of the decision of the Apex Court in the case of Ujagar Prints Vs Union of India [1989 (3) ELT 493 (SC)].<\/p>\n
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\n4. Learned Principal Commissioner (AR) after giving small picture of the activity undertaken by appellant submits that appellant no. 2 paid royalty charges to Procter & Gamble, USA and that value needs to be included in the value for discharging of central excise duty. She would submit that as per technical know-how and trade mark agreement dated 01.12.2004, between Procter & Gamble, USA and appellant no. 2, there is a transfer of manufacturing technology and know-how and trade mark for which royalty and technical fees are paid. It is the submission that once these amounts are paid towards royalty and technical fees, they have to become a part of assessable value as per the provisions of Section 4 r\/w relevant rules of the valuation rules. She would gainfully refer to CBEC No. 619\/10\/2002 dated 19.02.2002 and submits that it was clari<\/p>\n
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\n5. Considered the submissions made by both sides and perused the records.
\n6. It transpires from the records that the demand of the differential central excise duty on the appellant and imposition of penalty on appellant no. 2 is based upon the allegation and the findings that appellant no.1 has misdeclared the value of the goods cleared by them.
\n7. Undisputedly appellant is a job worker for appellant no. 2; manufactures Vicks Action 500 and Vicks Inhalers; discharges the duty liability on the said products based upon the formula of valuation as settled by the Apex Court in the case of<\/p>\n
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\n10. Secondly, reading the Apex Court Judgment in the case of Uj<\/p>\n
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