By TIOL News Service

NEW DELHI, MAR 27, 2017: THESE are Revenue appeals directed against the Order-in-Appeal which was in the context of the o-in-o confirming the total duty demand of Rs.28.35 lakhs, imposed penalties and ordered confiscation of seized goods but allowed to be redeemed on payment of redemption fine of Rs.25 lakhs.

After considering the submissions made by both sides, the Bench made the following observations -

+ Out of the total demand of Rs.28,35,468/-, an amount of Rs.16,59,090/- pertains to the period 08.01.2005 to 25.01.2007 and which has arisen on account of the wrong calculation of the duty liability on the basis of MRP assessment u/s 4A of the CEA, 1944. Inasmuch as pharmaceuticals products were included for assessment on MRP basis w.e.f 08.01.2005.

+ The explanation offered by the respondents is that they calculated the duty liability based on an article appearing in Excise Law Times with the bonafide belief that it is correct.

+ The Commissioner (Appeals) has taken the view that as the amount has arisen on account of such wrong calculation, demand can be sustained only within the normal period of time limit. Accordingly, he has directed the Original Adjudicating authority to re-quantify demand and confirm it for the period July 2006 to 25.01.2007.

+ The view adopted by the Commissioner (Appeals) cannot be faulted. There is nothing on record, based on which Revenue has alleged suppression on the part of the respondent. Accordingly, we uphold the demand falling within the normal time limit and vacate the remaining portion of demand. Penalty imposable under Section 11AC is also set aside.

+ Demand to the extent of Rs.7,74,558/- has been raised in respect of the product "Noophin Injection". Revenue has alleged that such injections were cleared with MRP of Rs.15/- by the respondents and not at the MRP of Rs.7.2 as declared in the invoices issued by the respondent. The basis for allegation of increased MRP is an investigation report sent by the Assistant Commissioner of Central Excise, Malenadu Division, Chennai. Respondent has raised serious objection to the basis for enhancing of MRP.

+ Increased MRP of Noophin injection has been alleged by the Revenue on the basis of investigation carried out in respect of New Pharmaceutical product in Karnataka. However, such investigation report has not been shared with the respondent during the course of the adjudicating proceedings. The concerned witness has also been not made available for examination by the respondents. In view of above, we find no reasons to interfere with findings of Commissioner (Appeals) setting aside this demand.

+ Since, the differential duty demand has arisen on account of wrong calculation, consequently, the order of the Commissioner (Appeals) is fully justified in setting aside the confiscation and hence upheld.

The appeals were disposed of.

The denovo proceedings were directed to be completed within a period of three months.

(See 2017-TIOL-1005-CESTAT-DEL)