Full Judgment
2. The dispute arising in these appeals relates to valuation of flavoured ready syrup (FRS) of Thumps Up and Coca Cola brands of aerated waters manufactured by the first appellant. Order impugned was passed pursuant to a show cause notice 26.3.98 invoking the extended period of limitation under proviso 11A(1). The period covered by the show cause notice is from 31.12.94 to March 1997. Under the impugned order the Commissioner confirmed duty demand of Rs. 30,49,200 imposed penalty of Rs. 10,28,469 on the first appellant under Section 11-AC and a further amount Rs. 1,50,000 under Rule 173-Q(1). The first appellant is made liable to pay interest under Section 11-AB from 28.9.96 to 17.3.97. The land, building, plant and machinery were directed to be confiscated under Rule 173-Q(2) and a redemption fine of Rs. 1,00,000 was imposed. A penalty of Rs. 2,00,000 was imposed on the second appellant and penalty @ Rs. 50,000 each on appellants (3) and (4) and a penalty of Rs. 25,000 on the 5th appellant under Rule 209A of the Central Excise Rules.
3. The three issues raised in the show cause notice that (a) the first appellant and second appellant are related persons (b) the exclusion of rent on durable/returnable containers and (c) cost of transportation in excess of the actuals were found against the assessee in the order impugned. In the present appeals detailed contentions are taken on merits of each of the issue. At the same time the appellants would submit that the show cause notice dated 26.3.98 is barred by limitation and on that ground alone the impugned order is to be set aside.
4. We will, therefore, first consider the contention on limitation. The show cause notice dated 25.3.98 for the period 31.12.94 to March 1997 has been issued after the expiry of normal period of limitation. In the show cause notice it is stated that the extended period of limitation is invoked on the ground, inter alia, of suppression of facts and deliberately contravention of the provisions of Central Excise Rules with intent to evade payment of duty. It is alleged that the first appellant suppressed the fact that the goods were sold to their holding company/related buyer namely, GAPL and did not intimate that fact to the department while filing price declarations/invoices. They have acted with the intention to suppress the fact to evade payment of excise duty.
5. It is contended by the first appellant before the Commissioner that the fact that GAPL, the bulk buyer was the holding company of CBL was routinely published in every year's balance sheet as a mandatory schedule and was within the knowledge of all concerned including the department. Reliance was also placed on show cause notice dated 6.1.97 issued by the Commissioner of Central Excise, Meerut and also the Order-in-Original No. 34/97 dated 18.6.97 passed by the Commissioner of Central Excise, Meerut where the fact that GAPL was the holding company of CBL has been specifically mentioned. It is further contended by the appellant that each clearance document (gate pass/invoice) has given the particulars of the customer, quantity sold, value charged and duty assessed were being sent to the department every month alongwith RT 12 Return. Under these circumstances, according to the appellant there is no justification for invoking the larger period of limitation in this case on the ground of first appellant suppressing the fact that the second appellant is its holding company.
6. The learned DR reiterated the reason given by the Commissioner in rejecting the contention of limitation.
7. The first appellant has filed a copy of the show cause notice dated 6.1.97. In page 3 of the above show cause it mentioned as follows: 'the party changed their sales pattern from 12.9.94 and started effecting sales at factory gate at 60% of total sales were to M/s.
Golden Agro Product Pvt. Ltd. (the holding company of M/s. Coolade Beverages)'.
The order dated 17.6.97 dropped the proceedings initiated under show cause notice dated 6.1.1987 is also produced by the appellant. In paragraph 29 of the impugned order the Commissioner has considered the contention raised by the assessed on the question of limitation. But it is relevant to note that he had made no reference to the show cause dated 6.1.97 and the order dated 18.6.97. The reference is made only to contentions relating to submission of the balance-sheet. The Commissioner observes that no evidence is produced by the assessee to show that the balance-sheets were made available to the department as claimed. In the light of the above facts, we are of the view that invoking larger period of limitation in this case was totally unjustified. When the department is aware of the fact that second appellant is the holding company of the first appellant and major portion of the sale is to the second appellant and show cause notice had been issued on that basis as early as 6.7.97, department cannot be heard to contend that the first appellant has suppressed the fact of second appellant being its holding company. Since we are inclined to allow the appeals on the ground of limitation, we do not propose to go into the other contentions raised in this appeal.