COMMISSIONER OF CENTRAL EXCISE Vs. GTC INDUSTRIES LIMITED

JUDGEMENT

(1.) M/s. G.T.C. Industries Limited (respondent herein) are the manufacturers of cigarettes. They also get cigarettes manufactured by other small cigarette manufacturers on job work basis. This batch of appeals relate to duty demands and penalties in respect of cigarettes manufactured by the job worker manufacturers on account of G.T.C.

(2.) The period under consideration in these appeals is 1.4.1983 to 31.1.1986 during which period excise duty was leviable on the basis of the sale price declared on the cigarette packets. Intelligence was gathered that the respondents had been evading central excise duty on cigarette consciously and deliberately manufacturing deceptively similar version of certain regular brand showing lower sale price as compared with that of the regular brand. However, selling the deceptively similar brand at the same price as the regular brand in the market and collecting the difference between the two sale price mentioned on the cigarette packets by various means as "flow back".

(3.) Searches were conducted on 21.1.1986 on the premises of M/s. G.T.C. Industries Limited as well as at the premises of their job-workers and thereafter elaborate investigation was conducted by the Director General, Anti Evasion of the Central Excise Department. As a result, show cause notices were issued to M/s. G.T.C. Industries Ltd., Vadodara on 23.3.1988, M/s. G.T.C. Industries Ltd., Mumbai on 29.3.1998, M/s. Shri Chandra Tobacco, M/s. Suvarna Filters and M/s. Universal along with M/s. G.T.C. on 25.3.1988, M/s. Kanpur Cigarette on 30.3.1988 and to M/s. J.K. Cigarette on 4.7.1998. Similar notices were issued to job workers as well.