SOUTH INDIA RESEARCH INSTITUTE Vs. CCE

JUDGEMENT

(1.) All these three appeals raise a common question of law and facts and hence they are all taken up together for disposal as per law. The appellants are all manufacturers of bulk drugs falling under Chapter Heading 29 of CETA 1985. The products are assessed to Central Excise Duty on ad valorem basis. The allegation against the appellants are that they have not paid the Excise Duty on the maximum sale price of bulk drugs specified in the first Schedule of Drugs Price (Control) Order 1995 as fixed from time to time by the Central Government in exercise of the powers conferred under Section 3 of the Essential Commodities Act, 1995 read with para (3) and (9) of the Drug Price (Control) Order. It was alleged that the price has to be assessed in terms of 4(l)(a)(ii) of CE Act, wherein it lays down that such maximum prices shall be the normal price of the said bulk drugs at the time of clearance for the purpose of payment of Central Excise Duty. As they had paid the duty at their selling price, the same was not a terms of Section 4 and there was a short payment in the matter and hence the larger period was invoked and demands have been confirmed.

(2.) It is contention of the appellants' Counsel that this very issue was agitated before the Larger Bench in the case of IPCA Laboratories v. CCE and the Larger Bench has clearly given a detailed finding holding that the duty has to be paid on the basis of the price at which the goods are sold and not at the maximum price fixed under relevant law. The Revenue had taken a contention that the issue is covered by the judgment of the Apex Court rendered in the case of Aluminium Industries Ltd. v. Collector of CE 1998 (99) 486 (SC). However, the Larger Bench has found that this Apex Court judgment is clearly distinguishable. The learned Counsel submits that the Tribunal has given categorical findings as to why the duty has to be paid on the basis of the selling price and not at the maximum price fixed under the Drug Price (Control) Order (DPCO). He also submits that the demands are barred by time as the issue was fully within the department's notice and the department had approved the prices. He also submits that the Commissioner of Central Excise, Hyderabad by OIO No. 27/2001 dated 19.11.2001 accepted their contentions on time bar and dropped the proceedings. In the order, he has referred to the Ministry's letter dated 5.7.2001 in F. No. 232/70/1999 addressed to the Office In the C&AG of India conveying the opinion of Law Ministry wherein they opined that 'the manufacturer was at liberty to sell his goods at a price lower than the maximum price and the normal price may vary from case to case'. He submitted a detailed written submission, drawing support from the judgment of the Supreme Court. He also relied on the several judgements of the Tribunal and the Supreme Court to contend that the demands are barred by time.

(3.) On the other hand, the learned SDR filed a written submission from the Revenue in which they have reiterated the findings given by the Commissioner in the impugned order. The learned SDR submitted that in terms of law, the maximum price has to be accepted and the duty has to be paid on the maximum price as laid down in Section 4 of the Act. He also submitted that the decision of the Apex Court in the Aluminium Industries Ltd. v. CCE (supra), applies to the facts of the case and, therefore, the Bench is required to take a difference view in the matter.