ESSEL PACKAGING LTD. Vs. CCE

JUDGEMENT

(1.) THESE three appeals arise from the same order -in -Original passed by Commissioner of Central Excise, Mumbai -III against the appellants confirming a duty demand of Rs. 54,30,713/ - and imposing a penalty of of Rs. 41 Lakhs under Rule 173Q of the Central Excise Rules and also directing the appellants to pay interest at the rate of 20% under Section 11AB of Central Excise Act, 1944. The main issue involved is whether the value of Plastic Caps is includible in the assessable value of the Tubes manufactured and cleared by the appellants. In the impugned order, the Adjudicating Commissioner has held that the same is includible. He has also held that the extended period under Section 11A (!) is applicable as there was suppression of facts, with intent to evade payment of duty. It has been submitted on behalf of the appellants that the Tubes manufactured by them are also sold without caps. In the case of supplies to M/s. Colgate, the appellants have fitted caps on the tubes and that in such cases, the caps were supplied to the appellants by M/s. Colgate. It has also been submitted by the appellants that out of the three Show Cause Notices, one Show Cause Notice dt. 3.4.1995 is time barred and interest under Section 11AB is not payable in respect of demand made for the period prior to September, 1996 in view of the Board's Circular No. 655/46/2002 -CX dt. 26.8.2002. The following case laws have been relied upon by the appellants in support of their submissions: -

(2.) ) Col -Tubes (P) Ltd. v. Collector 194 (72) ELT (342) (T) affirmed by Apex court in 1997 (90) ELT (A63).

(3.) SHRI M.K. Gupta, learned Jt. C.D.R. appearing for Revenue alongwith Shri Ishar singh, learned JDR argues that the cap is only a component of the Tube and therefore, its value has to be included in the value of the tube. He relies on the ratio of the Apex Court judgement in the case of UOI v. J.G. Glass Industries Ltd. . He further states that valuation and classification are entirely different issues and that valuation has to be done following the aforesaid decision of the Apex Court. He also contends that since the appellants have not dis -closed to the Department that value of the cap was not included in the assessable value, the extended period for raising demand is applicable in this case.