AUROBINDO PHARMA LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THIS is an appeal filed by M/s. Aurobindo Pharma Limited, Pondicherry (APL for short) against the Order -in -Original No. 5/2000 dated 15.1.2000 passed by the Commissioner of Central Excise, Trichy.

(2.) THE facts of the case are that APL was engaged in the manufacture of bulk drugs like Amoxycillin and Ampicillin. APL had sister units located at Medak and Hyderabad. The appellants used to send intermediate products 6 -APA and 7 -ADCA for further processing to their sister units. In a sale each in 96 -97 and 97 -98, they had also sold 6 -APA to unrelated buyers. The assessee used to file price declarations in terms of Rule 173C of the Central Excise Rules periodically for clearance of these goods. Investigations indicated that in 1997 -98, APL had apparently cleared these products to their two sister units paying duty on incorrect values based on ad hoc cost, undervaluing the goods and evading payment of excise duty. It was tentatively found that during the year 1997 -98, APL had adopted incorrect values based on material cost plus 10% of such cost towards overheads and profit margin for clearances of 6 -APA from 21.5.97 to 8.6.97 and from 10/97 to 3/98, and for a clearance on 05.09.97 of 7 -ADCA. Such clearances of 6 -APA and 7 -ADCA during 1997 -98 were tentatively determined to involve duty evasion to the extent of Rs. 51,80,003.57. Accordingly, a Show Cause Notice was issued to demand the above amount of duty, interest due thereon and to impose penalty on the assessee.

(3.) THE assessee contested the proposals. They claimed that they had regularly filed price declarations under Rule 173C, removed the goods under proper invoices and had filed RT -12 returns and invoices. As the goods had been cleared to sister units, there could be no allegation of misdeclaration of neither facts nor intent to evade payment of duty. Therefore longer period could not be invoked to demand the alleged short levy in view of the following case law: