Point of Law: Demand of excise duty - Re-open of concluded proceedings - Not permissible.

JUDGMENT :

UJJAL BHUYAN, J.

1. Heard Mr. Prakash Shah, learned counsel for the petitioner and Mr. Pradeep S. Jetly, learned senior counsel for the respondents.

2. By filing this petition under Article 226 of the Constitution of India, petitioner seeks quashing of show cause-cum-demand notice dated 26.05.2020 issued by the Commissioner of Central Goods and Services Tax and Central Excise, Audit-Thane i.e. respondent No. 2.

3. Case of the petitioner is that it 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 (briefly “the 1985 Act” hereinafter). It is stated that petitioner has its factories at Wagle Industrial Estate, Thane-400604; Pritesh Complex, Dapoda Road, Bhiwandi; Thane Nasik Highway, Bhiwandi; and also at Hyderabad. Apart from such factories petitioner has depots and clearing and forwarding (C&F) agents at various locations across India.

4. In the ordinary course of business petitioner had availed CENVAT credit of the excise duty/service tax paid on inputs/inputs services and utilized the same for payment of excise duty on the goods manufactured by the petitioner. Be it stated that the assessable value for payment of excise duty on the final produce, namely, safety razor blades and shaving system are determined under section 4A of the Central Excise Act, 1944 (briefly “the Central Excise Act” hereinafter) i.e. maximum retail price declared on the package less prescribed abatement.

5. Petitioner has described the process of manufacturing carried out by it in converting the raw material i.e. cold rolled stainless steel strips into the finished product i.e. safety razor blade and shaving system. It is stated that petitioner had entered into an agreement dated 07.10.2011 with Tigaksha Metallics Pvt. Ltd. (“Tigaksha” for short) for the purpose of processing of the goods on job work basis as per the terms and conditions contained therein. This agreement was renewed by three successive agreements dated 07.10.2012, 07.10.2013 and 01.04.2014. It is stated that petitioner had entered into another agreement dated 01.04.2015 with Tigaksha for further processing of petitioner’s goods including packaging for retail sale. The agreement dated 01.04.2015 was for the period 01.04.2015 to 31.03.2018.

5.1. Petitioner has stated that the language and clauses of all the agreements entered into by the petitioner with Tigaksha were identical.

6. Petitioner had transferred some of the intermediate/semi-finished goods on payment of excise duty at 110% of the cost of production under Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 (referred to hereinafter as “the Valuation Rules”) to one of its depots situated at Garget, Una, Himachal Pradesh. The goods were consigned to Tigaksha at Garget, Una, Himachal Pradesh for further processing under the aforesaid agreements i.e. agreement dated 01.04.2014 and agreement dated 01.04.2015.

7. Petitioner has explained that the main input/raw material used by the petitioner is the cold rolled stainless steel coils which the petitioner receives on payment of duty from its suppliers at its factory at Thane. Petitioner had availed credit of the excise duty paid thereon under Rule 3 of the CENVAT Credit Rules, 2004 (also referred to as “the CENVAT Credit Rules”). Thus, petitioner processed the said cold rolled stainless steel coils into strips and further processed into blades and other components of shaving system transferring those to its branch at Una, Himachal Pradesh where those were consigned to Tigaksha on payment of excise duty under Rule 8 of the Valuation Rules i.e. @ 110% of the cost of production. Invoices for such clearance