NIRMAL R. RUPAREL Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) ALL these appeals are filed against OIO No. 23/MP/VAPI/2013, dated 8 -4 -2013. Since all these appeals raises a common issue of law and facts, these are being disposed of by a common order. The relevant facts that arise for consideration, after filtering out the unnecessary details, are that the main appellant M/s. Standard Greases & Specialities Pvt. Ltd. (hereinafter referred to as SGSPL) are manufacturer of excisable goods and are holding valid registration for that purpose and are engaged in manufacture of excisable good like automotive lubricants, coolant, blended oil and different types of industrial pipes. Based on an intelligence received, the officers of Central Excise Department, visited the premises of SGSPL and undertook an investigation. During the investigation, it appeared to the officers that SGSPL had undervalued in respect of the goods which are manufactured for M/s. Atlantic Lubricants & Sp. Pvt. Ltd. and M/s. Petronas Marketing (India) Pvt. Ltd. (hereinafter referred to as 'Atlantic' and 'Petronas') - After recording various statements of the employees of the SGSPL, show cause notice was issued directing SGSPL as to why the demand of differential duty be not raised on them, as the value which is considered for discharge of Central Excise duty was under -valued, interest be not demanded and penalties be not imposed. SGSPL and other appellants contested the show cause notice on various grounds mainly on the ground that the agreement between Atlantic and Petronas was on principle to principle basis and the input required for manufacturing of final product were purchased by them and the machinery and the labour was their own, hence transaction value is the correct value on which Excise duty is correctly discharged. The adjudicating authority after following the due process of law, did not agree with the contentions raised by the appellant and confirmed the demand on the appellant by passing the following orders: -

(2.) AGGRIEVED by such an order, the appellants are before us.

(3.) LD . Counsel for the appellant would submit that the findings recorded by the adjudicating authority are incorrect. It is his submission that the appellants are not manufacturing goods on behalf of the Petronas or Atlantic and are procuring all the required raw materials including packing material on their own, they have their own plant and machinery, personnel, infrastructure and finance and the purchase of the finished product is negotiated price and SGSPL have discharged the applicable VAT on the sale of product to Petronas and Atlantic. After taking us through the agreements entered by SGSPL and Atlantic and Petronas, he would submit that the transactions between the said Petronas and Atlantic with the SGSPL is on principle to principle basis, recital of the agreement provides that the agreement is on principle to principle basis; that none of the signatories shall be treated as agent of one another in any form whatsoever; agreement provides that SGSPL is to act as an independent processor and manufacturer of lubricating oil and other speciality products; prior to 1 -4 -2007, Revenue never assessed the goods as being manufactured on job work basis and they have satisfied the condition of Section 4(1)(a) of the Central Excise Act, 1944. It is also his further submission that there being a sale of lubricating oil to Petronas and Atlantic, there is a transfer of a possession for a consideration; the Tribunal in the case of M/s. Innocorp Ltd. - : 2013 (289) E.L.T. 172 (Tri. -Bang.) has held that the provisions of Rule 10A of Central Excise Valuation Rules, 2000 will not apply in such a situation. It is his submission that SGSPL were in existence as manufacturer of lubricant oil before they entered into 'agreement with Petronas or Atlantic. It is' his submission the adjudicating authority has confirmed the demand on the ground that the Petronas and Atlantic had negotiated with the suppliers of additives and packing material and were controlling the quality and were making specific payment of the price of supply of material to appellant hence the Petronas and Atlantic have to be considered as having supplied the material to SGSPL due to which the provisions of Rule 10A of Central Excise Valuation Rules, 2000 will apply and the price at which the goods are sold in the market by Petronas and Atlantic needs be considered for discharge of duty liability; he would submit that such a finding is erroneous as similar issue came up before Tribunal in the case of Cowmandel Paints Ltd. - : 2010 (260) E.L.T. 440 (Tri. -Bang.) and before this Bench in the case of M/s. Abhijit Packaging Pvt. Ltd. - Final Order Nos. A/10630 -10634/2013, dated 3 -5 -2013 and the Tribunal has held in favour of the assessee. After taking us through the Rule 10A of Central Excise Valuation Rules, 2000, he would submit that the said rule envisages the manufacture of the goods on behalf of the raw material supplier. He would submit that in the case in hand, none of the raw material is supplied by Atlantic or Petronas but are procured by SGSPL from their own funds. He would also submit that the expression 'on behalf of' would apply when only three parties are involved which not the case in this appeal. It is his submission that the reliance placed by the adjudicating authority on the oral evidence of various persons to confirm the demand, cannot be relied upon in view of the written agreement as the said written evidence prevail over any other oral evidences. He would submit that there are various tariff and non -tariff notifications issued by C.B.E. & C. to clarify the term 'by and on behalf of' and would submit that the Board itself is very clear as to what the term 'by or on behalf of' intended. It is also his submission that the case is now decided by Apex Court in the case of Prestige Engg. (India) Ltd. - : 1994 (73) E.L.T. 497 (S.C.). It is also his submission that the adjudicating authority has not considered any of the submissions made by them in its proper perspective. He would further submit that the adjudicating authority has erred in holding that the extended period of limitation is invocable in this case as the appellant had been regularly filing the returns with the authorities and the entire activity undertaken by them was in the knowledge of the Department which was informed by a detailed letter dated 23 -12 -2009 addressed to the Commissioner of Central Excise & Service Tax, Vapi. It is his submission that various Government audit teams and CERA audit had been undertaken during which time, it was never detected by the authorities. It is his submission that the demand is liable to be set aside on merit as well as on limitation.