In a major relief to Supermax Personal Care, the Bombay High Court quashed show cause cum demand notice alleging excise duty evasion.
The petitioner, Supermax Personal Care Pvt. Ltd. is a company registered under the Companies Act, 1956 and is engaged in the business of manufacturing of excisable goods, such as, safety razors, blades and shaving system as well as cold rolled stainless steel strips falling under Chapters 82 and 72 of the Central Excise Tariff Act, 1985.
The petitioner was called upon to show-cause as to why the extended period envisaged under sub section (4) of section 11A of the Central Excise Act read with the Taxation and other Laws (Relaxation of Certain Provisions) Ordinance, 2020 should not be invoked to demand central excise duty evaded by the petitioner; as to why central excise duty amounting to Rs.44,87,53,889 being the aggregate of the central excise duty involved should not be jointly and severally demanded and recovered under the proviso to sub section (4) of section 11A of the Central Excise Act being the aggregate central excise duty involved on the suppressed production and clandestine clearances of twin type blades, razor blades, shaving components, blade cartridge collectively effected by the petitioner from and at Una, Himachal Pradesh and cleared during the period from April 2015 to June 2017; as to why interest at the appropriate rate should not be charged and recovered under the provisions of section 11AA of the Central Excise Act read with Rule 8 of the Central Excise Rules, 2002; and as to why penalty should not be imposed on the petitioner under section 11AC of the Central Excise Act.
The GST Commissionerate argued that since Supermax Personal Care Pvt Ltd gets excisable products through Tigaksha, which assembles the products and even finalises the packaging work, it ought to pay the levied excise duties. It argued that the Supermax Personal Care Pvt Ltd cannot evade paying the tax claiming that it is the principal manufacturer and not the Tigaksha.
The petitioner urged that the final product is sold from its sales depots across the country. It argued that the product was not sold from the end of Tigaksha, which enjoys area-based exemption.
The bench of Justices Ujjal Bhuyan and Milind Jadhav opined that the impugned show cause-cum-demand notice is clearly without jurisdiction and is an attempt to reopen an issue which was concluded by the adjudicating authority vide the order in original which is not permissible
“Till such time the retail packed blades were not sold from the sales depot of the petitioner. Therefore, petitioner was the principal manufacturer of the goods and as such had the responsibility to discharge the liability in respect of central excise duty leviable and payable on the final products under section 4A of the Central Excise Act which had not been discharged by the petitioner,” the court said.
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