HINDUSTAN UNILEVER LTD. Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) THE appellant is in appeal against the impugned order wherein duty demand of Rs. 1,70,40,080/ - has been confirmed along with interest and equivalent amount of penalty on account of undervaluation. Brief facts of the case are that the appellant is manufacturer of soap and like products and having several units for manufacturing of their final product and they are also getting the products manufactured through job workers. The appellant is having one unit at Sewri, Mumbai. From Sewri, the appellant had cleared the Unfinished Soap Noodles to their sister unit at Goa on a price of Rs. 47,250 per MT, on the basis of cost construction method. It is also seen that the appellant has cleared the same goods to M/s. Aquagel Chemicals P. Ltd., Rs. 28,600/ - per MT. In these circumstances, an investigation was carried out and a query was raised by the Superintendent of Central Excise through a letter dated 25 -11 -2003 regarding the issue of under -valuation/sale pattern while supplying Unfinished Soap Noodles to M/s. Aquagel Chemicals P. Ltd. The said letter was replied vide letter dated 9 -1 -2004 and thereafter the Superintendent of Central Excise vide letter dated 30 -1 -2004 pointed out that such contracted sale price formed the sole and only consideration for sale. Thereafter, on 14 -1 -2008 a show cause notice was issued for demanding differential duty on account of undervaluation of the goods sold to M/s. Aquagel Chemicals P. Ltd. The show cause notice was adjudicated and an impugned order was passed. Aggrieved by the said order, the appellant is before us.

(2.) HEARD both sides.

(3.) ON the other hand, the learned AR appearing for the Revenue strongly opposes the contentions of the learned Counsel and submits that they have not supplied the copy of contract entered between the appellant and M/s. Aquagel Chemicals P. Ltd., therefore, they suppressed the fact. Accordingly, the lower authority has rightly invoked the extended period of limitation. With regard to sale pattern for the subsequent period, the learned A.R. submits that he has no knowledge of the subsequent period whether the sale pattern is allowed or not. On merits he submits that as per Rule 6 of the Valuation Rules, there may be some flow of cash to the appellants from M/s. Aquagel Chemicals P. Ltd., therefore, the clearance of the goods to M/s. Aquagel Chemicals P. Ltd., is influenced. In these circumstances, he prays that the impugned order is to be upheld.