S.L. Peeran, Member (J)
1. This appeal arises from Order-in-Original No. 12/2000 dt. 30.11.2000 passed by the Commissioner of Central Excise, Chennai confirming the demands in terms of the show cause notice for differential duty on the allegation of undervaluation of the product TRICLOSAN, a bulk drug manufactured by the appellants by invoking the Rule 9(2) of the Central Excise Rules read with the proviso to Section 11A of the Central Excise Act, 1944. They were called upon to explain as to why the price of Rs. 2242 per kg. of Triclosan in respect of sales to be effected in favour M/s. Sodium Metal Private Limited and M/s. WF Limited should not be adopted. The appellants filed detailed reply in this regard and contested the Revenue’s case including the allegation of mis-declaration and undervaluation. They contended that the Revenue cannot revise the value as brought out in show cause notice. The appellants have also filed large number of citations of Hon’ble Apex Court judgments and the decisions of the Tribunal and contend that the price adopted by them was in terms of the law and, therefore, the demand is required to be dropped. The appellants were directed to appear for personal hearing. The request for adjournment was not considered. Their prayer for adjournment was due to the difficulty of the Counsel from appearing before the Commissioner. The Commissioner has proceeded to decide and confirmed the demands ex-parte including imposition of huge penalty on the appellants.
2. The Ld. Counsel Shri V. Lakshmikumaran accompanied Shri G. Shiva Das, Ld. Counsel argued on the violation of Principles of Natural Justice and contended that there is no justifiable reason to deny the adjournment. There was no hurry in the matter and as the issue was a complex one and required to be argued at length therefore, Commissioner ought to have granted another opportunity to the appellants to contest the case. Besides this argument, the Ld. Counsel also filed detailed written submissions on merits contending that the purchasers of the appellants are Industrial Consumer and each of the customer is required to be considered as a class by itself and consequently separate price can be adopted by the appellants for each of the customers. In this regard, he contended that the price of Rs. 2242 per kg. of one customer cannot be made applicable to another customer viz. M/s. Sodium Metal Private Ltd. and M/s. WF Limited. In this regard following judgments are relied.
(a) Ind-Sphinx Precision Pvt. Ltd v. CCE .
(b) Addition & Co. v. CCE Chennai 1999 (84) ECR 587.
(c) CCE, v. Kirloskar Brothers Ltd. 2001 (44) RLT 336.
He also relied on the Hon’ble Apex Court judgment rendered in the case of Metal Box Ltd. v. CCE Madras wherein it has been held that purchaser who purchases in bulk quantities is entitled to a discount as high as 50%. The Ld. Counsel further submits that if this decision is applied and from the price of Rs. 2242 per kg. reduction of 46.4% is made, then the result is that the price would be Rs. 1200 per kg. only. The Ld. Counsel submits that in their own case the percentage of sale to one party is 97% therefore, the miniscule per centage of sale to other person cannot be adopted for the sale made to the bulk purchasers of 97% of their complete production. In this regard, reliance is also placed on this Bench ruling referred in the case of Addition & Co. v. CCE 1999 (84) ECR 587 wherein it has been held that prices charged to each such customers has to be treated as normal price. He submits that the relationship between the appellants and M/s. Sodium metals has all along been the subject matter of enquiry. On an enquiry by the Department, the appellants were earlier issued with show cause notices and adjudicated. In those orders it has been clearly held that the transactions between the appellants and Sodium Metals is on Principal to Principal basis and purely on commercial consideration. The order of the Commissioner was challenged by the Revenue and the Tribunal vide its Final Order No. 675-677/99-C dt. 6.8.99 upheld the order of the Commissioner of Central Excise. He submits that the issue is therefore settled in favour of the Revenue. It is not opened to the Revenue to now contend that the price is required to be revised. The Ld. Counsel submits that when there was an approved price lists and goods were revoked after documentation, in such circumstances Rule 9 of the Central Excise Rules cannot be invoked as there is no clandestine removal. He also submits that the demand is Revenue neutral since the total duty paid by the appellants is available as Modvat credit to M/s. Sodium Metal. The Ld. Counsel also relies on the judgment of the Hon’ble Apex Court to plea that the demand of duty is time bar.
3. On the other hand, Ld. DR submits that the Commission has given sufficient opportunities. The appellants had been put to warning that if they failed to appear on the next date of hearing then the matter would be decided ex-parte. Therefore, the Commissioner cannot be faulted for having passed by impugned order. He pointed out that the bulk purchase was also sold at the same rate of Rs. 2242 up to 94 and the revision took place to Rs. 1200 thereafter. After the revision there was no normal sale to other parties. He pointed out that appellants had stated that the price revision was due to the factor of non-availability of purchaser. However, the department had placed the evidence of foreign purchaser to whom sales were refused. He submits that the Commissioner has also gone into all these aspects of the matter and that there is no infirmity in the order. He pointed out that the impugned order has also approved the retail price of the product at Rs. 2354 per kg. under contract price control order in 1993. The Ld DR submits that the Ld. Commissioner has distinguished the case laws in the matter. The Ld. Counsel, while countering, submits that the facts cited by the Ld. DR is not in terms of the show cause notice and he seeks for remand of the matter so that all the allegations made in the SCN can be effectively countered. The Ld. DR submits that the Ld. Commissioner has distinguished the case laws in the matter.
4. We have carefully considered all the submissions. We notice that all though the appellants had been put to notice that the matter would be decided ex-parte if they seek further adjournment; but yet the reason for each adjournment has to be considered on its own merit. Where the party seeks an adjournment due to genuine reasons, the same cannot be turned down and matter taken up and decided ex parte.
This will be violative of Principles of Natural Justice. In this case the Revenue was seeking to confirm heavy duty of more than Rs. 1.25 crores by invoking the extending the larger period. The matter requires very careful scrutiny by analysing the evidence on record including the case laws. The Commissioner has clearly violated the Principles of natural Justice. Therefore, the impugned order is set aside and the matter is remanded to the original authority for de novo consideration. The appellants shall co-operate in the proceedings and the Commissioner shall pass a considered speaking order after granting personal hearing expeditiously.