In a major relief to M/s Fresenius Kabi Oncology Limited, the appellant, the Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ruled that the deduction on account of octroi and additional sales tax are permissible.
The two appeals are filed against the orders of the Commissioner (Appeals), Chandigarh which were passed in remand consequent upon the Tribunal remanding the matter back to the authority.
The appellant M/s Fresenius Kabi Oncology Limited (previously known as Dabur India Limited, Injection Division) is engaged in manufacture and clearance of PP Medicaments. During the visit to the factory, Officers of the Preventive Unit observed that the appellant was clearing the medicaments claiming deduction on the count of octroi charges and additional sales tax on an equalized basis rather than on actual basis.
The Show Cause Notices (SCN) were issued and confirmed and the same have reached the Tribunal in the second round of litigation.
Krati Singh and Aman Singh, Advocates for the appellant submitted that the show cause notice was only in respect of claim of deduction on the count of Octroi charges and Additional Sales Tax on an equalized basis and since, there is no ambiguity in the language of the SCN mere mentioning of figures will not empower the Department to collect Excise Duty on an item which was not even agitated in the SCN.
Authorized Representative appearing for the Department reiterates the findings of the Order-in-Appeal and submitted that when the SCN mentions the liability of the appellants in pecuniary terms, mere non-mention of the specific words “Secondary Freight” does not vitiate the proceedings of the SCN.
The Two-Member Bench consisting of SS Garg, Judicial Member and P Anjani Kumar, Technical Member observed that “In the instant case, we find that there was no whisper of seeking denial of deduction on secondary freight and to that extent, there is no ambiguity in the SCN and it is not open for the Department to claim confirmation of duty on account of secondary freight at this juncture.”
“We find that it has been held in several cases that the SCN is not an empty formality and the same needs to be clear and unambiguous. It is not open for the Department just to seek a demand on the basis of figures supplied by the appellant by mistake” the Tribunal opined.
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