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CUSTOMS, EXCISE AND GOLD (CONTROL) APPELLATE TRIBUNAL, NEW DELHI
U.L. BHAT, K. SANKARARAMAN, JJ.
ITC Ltd. -Appellant
Versus
Commissioner of Central Excise, New Delhi -Respondent
Final Order Nos. 1231-1243/98-A Appeal Nos. E/209 to 211, 288 to 293, 294, 331, 332 & 338/96-A, 1231 of 1998, 1243 of 1998, E/209 of 1996, 211 of 1996, 288 of 1996, 293 of 1996, 294 of 1996, 331 of 1996, 332 of 1996, 338 of 1996
Decided On : 04-09-1998
Per Justice U.L. Bhat :
These appeals have been filed against Order-in-Original No. 3/95 dated 29.12.95 passed by the Commissioner of Central Excise, Delhi. Following are the particulars of the appellants :-
| Appeal No. | Name of the appellant | Referred to as |
| E/209/96-A | M/s. I.T.C. Ltd. ITC | |
| E/210/96-A | J.N. Sapru | - |
| E/211/96-A | J. Narayan | - |
| E/288/96-A | M/s. Asia Tobacco Ltd. ATC | |
| E/289/96-A | M/s. Hyderabad Deccan Cigarette Factory Ltd. HDCF | |
| E/290/96-A | M/s. Lakshmi Tobacco Coy. LTC | |
| E/291/96-A | M/s. Reliable Cigarettes and Tobacco Industries (Pvt) Ltd. RCTI | |
| E/292/96-A | M/s. Master Tobacco Co. MTC | |
| E/293/96 | M/s. Crown Tobacco Coy. CTC | |
| E/294/96-A | R. Bhoothalingam | |
| E/331/96-A | Samir Ghosh | |
| E/332/96-A | Abhijit Basu | |
| E/338/96-A | S.K. Mehta |
2. The particulars of demand of duty proposed in the show cause notice for the period 1.3.83 to 28.2.87 and demand confirmed and penalty imposed on the assessees are as follows :-
| Concern under Rule 9 (2) and 52A (5) (c) | Duty proposed (in rupees) Rule 209 | Duty confirmed (in rupees) | Penalty in rupees | Penalty under |
| ITC Bangalore | 279,83,88,692.08 | 279,03,10,328.45 | 14 Crores | 20 Crores |
| ITC Munghyr | 112,70,42,540.04 | 112,08,90,897.49 | 2.5 Crores | 4.5 Crores |
| ITC Kidderpore | 69,42,10,874.20 | 67,80,89,865.15 | 3 Crores | 3.5 Crores |
| ITC Saharanpur | 159,76,26,710.92 | 159,21,99,235.92 | 6.5 Crores | 8 Crores |
| ITC Bombay | 64,11,13,047.50 | 63,39,12,125.75 | 1.5 Crores | 3 Crores |
| MTC | 19,39,84,485.00 | 19,33,94,394.40 | 25 Lacs | 40 Lacs |
| CTC | 9,88,88,782.00 | 9,79,60,007.00 | 12 Lacs | 20 Lacs |
| ATC | 43,07,01,080.00 | 43,07,00,580.00 | 2 Crores | 1 Crore |
| RCTI | 26,60,43,577.57 | 26,60,435,77.57 | 12 Lacs | 12 Lacs |
| LTC | 1,77,25,550.00 | (Same as proposed) | 25 Lacs | 40 Lacs |
| HDCF | 15,14,29,171.20 | (Same as proposed) | 1.5 Crores | 40 Lacs |
The particulars of penalty imposed on the Directors are as follows :-
| Individual | Penalty in rupees under Rule 9 (2) & 52A (5) (c) | Penalty (in rupees) under Rule 209. |
| S.K. Mehta | 25 Lakhs | 50 Lakhs |
| J.N. Sapru | 25 Lakhs | 50 Lakhs |
| J. Narayan | 25 Lakhs | 50 Lakhs |
| S. Ghosh | 15 Lakhs | 20 Lakhs |
| A. Basu | 15 Lakhs | 20 Lakhs |
| R. Bhoothalingam | 10 Lakhs | 10 Lakhs |
Confiscation of land, buildings and other assets of the several assessees, though proposed in the show cause notice, was not ordered.
3. Different units of ITC Ltd. (for short, ITC) are engaged in the manufacture of cigarettes of various brands. The other concerns who are also appellants manufacture cigarette as job workers of ITC. Cigarettes fell under erstwhile T.I. 4 (II) (2) and presently fall under Chapter 24 of Central Excise Tariff. Central Excise duty on cigarettes was ad valorem prior to 1.3.83 (except under Notification No. 30/79 which provided for effective rate of duty based on value and number with effect from which date it was made specific with different slabs based on the "adjusted sale price" (for short, "ASP"), that is, the unit sale price arrived at by dividing by the number of cigarettes in each package the maximum retail price (for short, MRP), exclusive of local taxes only, at which the package may be sold in accordance with the declaration printed on such packages. The appellants were printing maximum retail price on the packages and paying excise duty on the basis of the appropriate slab during the period from 1.3.83 to 28.2.87. With effect from 1.3.87, the scheme of exemption was changed by adopting specific duty structure based on the length of cigarettes.
4. Tariff rate of duty during the relevant period was as follows :-
| Date | Basic Duty | Additional Duty | Special Excise Duty |
| 1.3.83 | Rs. 440.00 per thousand or 300% ad valorem plus Rs. 20.00 per thousand which-ever is higher. | Rs. 160.00 per thousand or 110% ad valorem plus Rs. 10.00 per thousand which- ever is higher. | NIL |
| 1.3.84 | Rs. 440.00 per thousand or 300% ad valorem plus Rs. 20.00 per thousand, which-ever is higher. | Rs. 260.00 per thousand or 175% ad valorem plus Rs. 12.00 per thousand, which- ever is higher. | NIL |
| 17.3.85 | -do- | -do- | -do- |
| 25.3.85 | -do- | -do- | 10% of Basic |
| 2.9.85 | -do- | -do- | NIL |
Partial exemption was granted under successive Notification Nos. 36/83 dated 1.3.83, 211/83 dated 4.8.83 (as amended by Notification No. 271/83), 14/84, 100/85 dated 25.3.85, 134/85 dated 24.5.85
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