Per G.R. Sharma :

M/s. Futura Polymers Limited have filed this appeal. Being aggrieved by the order passed by the learned Commissioner (Appeals).

2. The facts of the case in brief are that the appellants are engaged in the manufacture of polyester chips, polyester (PET) preforms etc. They are a 100% Export Oriented Unit (EOU). During the course of manufacture of polyester chips of crystalline grade, polyester chips of Amorphous grade emerge. The appellants do not export the same but sell them in the domestic tariff area to M/s. Indian Organic Chemicals Limited on payment of applicable duty in terms of Notification No. 2/95-CE on the transaction value at which the goods are sold to M/s. Indian Organic Chemicals Limited. The department was of the view that the appellant and M/s. Indian Organic Chemicals Limited are related persons and therefore the transaction value is to be declared in terms of Rule 4 of Customs Valuation Rules. A show cause notice was accordingly issued proposing to determine the assessable value under Rule 8 of Customs Valuation Rules and sought to demand differential duty on the goods sold in the domestic tariff area through M/s. Indian Organic Chemicals Limited. The Commissioner held that the appellant and M/s. Indian Organic Chemicals Ltd. are to be treated as related person. On the second question about the limitation, the learned Commissioner (Appeals) held that invoking of extended period is as per law and therefore imposition of penalty under Section 11AC and demand of interest under Section 11AB is upheld.

3. Arguing the case for the appellant, Shri B.L. Narsimhan, learned Advocate submits that he is not arguing the case on merits. He submits that he is arguing the case only on limitation. The learned Counsel submits that in the show cause notice there was no allegation of fraud, collusion, suppression or mis-statement to evade payment of duty. He submits that it is essential to show which of these ingredients is invoked in the show case notice. Referring to the judgment of the Hon'ble Supreme Court in the case of Collector of Central Excise Vs. HMM Limited reported in 1995 (76) ELT 497 (SC). He submits that for invoking a longer period beyond six months any one of the ingredients in the proviso to Section 11A(1) are required to be indicated. He submits that none of the ingredients have been alleged in the show cause notice. He, therefore, submits that the longer period can not be invoked. The learned Counsel therefore prays that the appellant succeeds on the point of limitation and their appeal may be allowed with consequential relief.

4. Ms. K.A. Mishra, Ld. SDR submits that show cause notice speaks of invoking proviso to Section 11A(1) of the Central Excise Act. She submits that the proviso includes the ingredients of fraud, collusion, mis-statement and suppression with intent to evade payment of duty and therefore once the proviso to Section 11A(1) is invoked the ingredients of the proviso automatically come into play. She, therefore, submits that the contention of the appellant that ingredients of the proviso to Section 11A(1) have not been mentioned specifically untenable. She therefore, prays that even on limitation the appellant has no case and therefore prays that the appeal may be rejected.

5. We have considered the rival submissions. We have also perused the evidence on record as also the case law cited by the Appellant. In the instant case we note that two issues arise for determination. The first issue is about related person and the second issue is about limitation.

6. On the first issue the learned Counsel submits that he is not pressing any arguments. He submits that he would like to adduce arguments only on the limitation aspect.

7. We note that the emphasis of the learned Counsel was that the Apex Court in the case of CCE, Vs. HMM Ltd. has specifically ruled that any of the ingredients of proviso to Section 11A(1) should be specifically mentioned in the show cause notice. Therefore, th