Commissioner of Central Excise, Meerut Vs. T.C. Health Care (P) Ltd.
EmailAppeal: Civil Appeal Nos. 3638-3644 of 2000
Petitioner: Commissioner of Central Excise, Meerut
Respondent: T.C. Health Care (P) Ltd.
Apeal: Civil Appeal Nos. 3638-3644 of 2000
Judges: N. SANTOSH HEGDE & ASHOK BHAN, JJ.
Date of Judgment: Oct 31, 2001
Head Note:
EXCISE
Central Excise Rules, 1944
Rules 9(1), 52A, C, 173F, G read with Central Excise Act, 1944 – Section 11 – Raising of demand – Mis-declared goods – Transaction held to be not commercial – In appeal, tribunal finding that transaction by assessee with other company were same as that of other manufacturers, dealing with same company – Fact noted by authorities but not appreciated. Held that findings of fact finally by fact finding forum and such finding being not perverse, cannot be interfered. Practice and procedure. Constitution of India, Article 136. (Paras 2, 4)
JUDGEMENT:
ORDER
1. By an order made in the adjudication proceedings on 27th of November, 1997, the commissioner, Central Excise Meerut-I held M/s T.C. Health Care (P) Ltd. (respondent herein) had mis-declared the assessable value of the products manufactured by it, by suppressing the actual price of such products. Hence, it held them as having contravened rules 9(1), 52A, C, 173F and 173G of the Central Excise Rules and raised a demand for a sum of Rs. 4,57,51,508,17 (Rupees four crores fifty seven lacs fifty one thousand five hundred eight and paise seventeen only) under the provisions of section 11 of the Central Excise Act. He also levied an equivalent amount as penalty under rule 173Q for contravention of the abovesaid provisions of the rules. While making the said order, the said commissioner came to the conclusion that the transactions between the Modi Revlon (P) Ltd. and the respondents were not truly commerical transactions and were tainted by extra commercial considerations and the transactions between the said Modi Revlon and the respondents are not at arm’s length. He also held in view of the fact that it was not possible for him to arrive at the actual additional considerations received by the respondents by following the procedure prescribed under rules 5 and 6 of the abovesaid rules, he invoked the power vested under rule 7 of the said rules and made a best of judgment assessment to come to the conclusion what is the value of the mis-declared goods as well as the penalty to be levied.
2. Being aggrieved by the said order, the respondent approached the Customs Excise and Gold (Control) Appellate Tribunal (the ‘tribunal’) by way of an appeal. The said tribunal on a reconsideration of the material on record came to the
contra – conclusion that the department had failed to establish that, as a matter of fact, there was any extra-commercial consideration in the transactions between the appellants and the Modi Revlon. In this process, the tribunal also came to the conclusion that Modi Revlon had entered into similar contracts with other manufacturers for getting cosmetics and other allied articles manufactured for them and those manufacturers were also manufacturing the very same product as manufactured by the respondents, hence, those transactions were similar to the one with which the respondents herein was concerned. The tribunal further held that though the commissioner noticed the said fact he did not properly appreciate the said material which has vitiated the finding given by the commissioner. The tribunal also independently considered the various other materials available on record and came to the conclusion that the findings of the commissioner cannot be sustained. Hence, it allowed the appeals and set aside the orders of the commissioner.
3. In these appeals, on behalf of the Union of India, it is contended that the transactions which Modi Revlon had entered into with other manufacturers were not similar transactions, hence, the tribunal ought not to have placed any reliance on the same.
4. We have heard the learned counsel for the parties and also perused the records. In the instant case, we notice that the tribunal has considered all the material on records and has justly disagreed with the findings of the commissioner. Apart from the fact that the tribunal is the final forum of facts, we also do not find any perversity in the findings of the tribunal nor do we find any error which calls for interference by us. The question involved in these appeals being pure questions of fact. We are not inclined to interfere with the findings of the tribunal, hence, these appeals fail. No costs.
1. By an order made in the adjudication proceedings on 27th of November, 1997, the commissioner, Central Excise Meerut-I held M/s T.C. Health Care (P) Ltd. (respondent herein) had mis-declared the assessable value of the products manufactured by it, by suppressing the actual price of such products. Hence, it held them as having contravened rules 9(1), 52A, C, 173F and 173G of the Central Excise Rules and raised a demand for a sum of Rs. 4,57,51,508,17 (Rupees four crores fifty seven lacs fifty one thousand five hundred eight and paise seventeen only) under the provisions of section 11 of the Central Excise Act. He also levied an equivalent amount as penalty under rule 173Q for contravention of the abovesaid provisions of the rules. While making the said order, the said commissioner came to the conclusion that the transactions between the Modi Revlon (P) Ltd. and the respondents were not truly commerical transactions and were tainted by extra commercial considerations and the transactions between the said Modi Revlon and the respondents are not at arm’s length. He also held in view of the fact that it was not possible for him to arrive at the actual additional considerations received by the respondents by following the procedure prescribed under rules 5 and 6 of the abovesaid rules, he invoked the power vested under rule 7 of the said rules and made a best of judgment assessment to come to the conclusion what is the value of the mis-declared goods as well as the penalty to be levied.
2. Being aggrieved by the said order, the respondent approached the Customs Excise and Gold (Control) Appellate Tribunal (the ‘tribunal’) by way of an appeal. The said tribunal on a reconsideration of the material on record came to the
contra – conclusion that the department had failed to establish that, as a matter of fact, there was any extra-commercial consideration in the transactions between the appellants and the Modi Revlon. In this process, the tribunal also came to the conclusion that Modi Revlon had entered into similar contracts with other manufacturers for getting cosmetics and other allied articles manufactured for them and those manufacturers were also manufacturing the very same product as manufactured by the respondents, hence, those transactions were similar to the one with which the respondents herein was concerned. The tribunal further held that though the commissioner noticed the said fact he did not properly appreciate the said material which has vitiated the finding given by the commissioner. The tribunal also independently considered the various other materials available on record and came to the conclusion that the findings of the commissioner cannot be sustained. Hence, it allowed the appeals and set aside the orders of the commissioner.
3. In these appeals, on behalf of the Union of India, it is contended that the transactions which Modi Revlon had entered into with other manufacturers were not similar transactions, hence, the tribunal ought not to have placed any reliance on the same.
4. We have heard the learned counsel for the parties and also perused the records. In the instant case, we notice that the tribunal has considered all the material on records and has justly disagreed with the findings of the commissioner. Apart from the fact that the tribunal is the final forum of facts, we also do not find any perversity in the findings of the tribunal nor do we find any error which calls for interference by us. The question involved in these appeals being pure questions of fact. We are not inclined to interfere with the findings of the tribunal, hence, these appeals fail. No costs.
