ORDER

1. This appeal has been filed by the Revenue under Section 35(1)(b) of the Central Excise Act, 1944 against the judgment and final order dated -4-2002 passed by the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi (for short "the Tribunal") whereby the Tribunal has allowed the appeals filed by the assessee by setting aside the impugned order passed by the Commissioner. The issue involved in this appeal is regarding he correct assessable value of the respondent's products and the suppression if the said correct assessable value by the respondents.

Facts

2. The respondents are engaged in the manufacture of pan masala falling under Chapter Sub-Heading 2106.00 of the First Schedule to the Central Excise Tariff Act, 1985 (for short "the Tariff Act"). According to the Revenue, the respondents were resorting to undervaluation of goods for the purpose of payment of Central excise duty during the period 1-1-1995 to 28-9-1996.

3. The respondents were issued a show-cause notice dated 4-2-2000 asking them to show cause as to why Central excise duty amounting to Rs 1,93,83,911 may not be demanded under the proviso to Section 11-A(1) of the Act and why penalty should not be imposed under Section 11-AC read with Rule 173-Q of the Central Excise Rules, 1944 (for short "the Rules").

4. The respondents were also required to show cause as to why interest on duty so evaded should not be demanded under Section 11-AB of the Act on the ground that they were clearing the goods at different discounts and deductions varying from State to State which they termed as regional discounts during the relevant period. Shri Deepak Kothari, Managing Director of the company was also required to show cause as to why penalty should not be imposed upon him under Rule 209 of the Rules for his involvement in evasion of payment of Central excise duty.

5. The authority-in-original confirmed the demand of the Central excise duty and penalty of an equal amount was also imposed. It also imposed 1 penalty of Rs 1,00,000 upon Shri Deepak Kothari under Rule 209-A of the Rules. It was also directed that the respondents shall pay interest on the amount of duty confirmed. Being aggrieved by the order of the authority-inoriginal, the respondents filed appeals before the Tribunal.

6. The Tribunal has set aside the order-in-original on the ground that the respondents were earlier issued seven show-cause notices between March 1994 to October 1995 for the period August 1993 to July 1995. It was alleged in those show-cause notices that different prices for dealers situated in different regions cannot be considered as different class of buyers. It was alleged that all the dealers should be treated as the same class of buyers. Accordingly, differential duty was proposed to be dem!P1ded. The respondents resisted the show-cause notices. The case of the respondents was that different prices for dealers situated in different regions is permissible in law. However, the Assistant Commissioner confirmed the demands as proposed in the show-cause notices.

7. Aggrieved against the order of the Assistant Commissioner, the respondents filed appeal before the Commissioner (Appeals), Allahabad. The Commissioner vide his order dated 28-11-1997 set aside the order passed by the Assistant Commissioner and allowed the appeal. It was held as under:

"I have carefully gone through the case records, ground of appeal, submissions made during personal hearing and various case laws relied upon by the appellants. The appellants are engaged in the manufacture of pan masala falling under Sub-Heading 2106.00 of the Central Excise Tariff Act, 1985. They sell the product directly from the factory to the dealers situated in different States/regions. The appellants also stock transfer some quantity to the C&F agents situated in some of the States/ regions. The ultimate consumer price is uniform allover the country. The price to be charged by the wholesale buyer to the retailers is also uniform. In order