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E/531/2012

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL

BANGALORE REGIONAL BENCH - COURT NO. 1

Central Excise Appeal No. 531 of 2012

(Arising out of Order-in-Original No. 36/2011 dated 30.12.2011 passed by the Commissioner of Central Excise, Bangalore.)

M/s. General Commodities Pvt. Ltd.

Appellant(s)

604, Queens Corner A

3 Queens Road, Bangalore – 560 001.

VERSUS Commissioner of Central

Excise and Service Tax, Respondent(s)

Central Revenue Building, Queens Road, Bangalore – 560 001.

APPEARANCE:

Mr. B.N. Gururaj, Advocate for the Appellant M r. M.A. Jithendra, Assistant Commissioner (AR) for the Respondent CORAM: HON’BLE DR. D.M. MISRA, MEMBER (JUDICIAL)

HON’BLE MRS R. BHAGYA DEVI, MEMBER (TECHNICAL)

Final Order No. 20465 /2026

DATE OF HEARING: 12.12.2025 DATE OF DECISION: 02.04.2026

PER : DR. D.M. MISRA

This appeal is filed against Order-in-Original No.36/2011 dated 30.12.2011 passed by the Commissioner of Central Excise,

Bangalore-II Commissionerate.

2. Briefly stated the facts of the case are that the appellants are basically engaged in the export of coffee and spices. These commodities are purchased from growers, agents, farmers and traders and after processing the same viz., de-husking, sorting,

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bulking, grading, packing, etc., these are exported through ports of Cochin, Haldia, Mangalore, ICD, Bangalore. The finished goods were exported in HDPE/PP woven Jumbo bags, HCF jute bags, poly sacks, plylined PP/HDPE woven bags etc., after being packed and machine stitched against export under target plus scheme i.e., exports made during 2004-05. 12 target plus licenses were granted to them on 05.09.2006 by JDGFT, Chennai. Against this authorization, they had imported plastic granules of various grades duty-free through Chennai Port. These plastic granules of various grades were used in the manufacture of PP fabrics, which in turn are used in the manufacture of jumbo bags, liners, assorted plastic bags, etc. The imports were made from high sea sales as well as direct

purchases.

3. The Appellant were engaged in the manufacture of PP fabric, liners, plain film flexible, assorted plastic bags, pp woven fabrics, etc., during the period December 2007 to January 2009. However, after closure of their factory, most of the above products were manufactured on job work basis. The raw materials of various grades of imported plastic granules were brought in trucks to their factory in Bangalore and sent to the job workers premises for processing. Once the job worker completes the process of conversion of imported granules into finished goods, it did not come to their premises but were sold to the job worker, against raising excise invoices and on payment of appropriate duty on the transaction value. For selling this job worked goods to the job worker, necessary permission was obtained from the jurisdictional Assistant Commissioner. Wherever there was no permission obtained for sale from the job worker premises, they brought the goods back to their factory; and stitch it and after packing, clear the finished goods. The department has initiated investigations against the appellant in

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May 2010 alleging that the price at which the goods are sold by the appellant to the job worker is undervalued and consequently, after recording statement of the person concerned, redetermined the assessable value of the goods and issued show-cause notice on 16.06.2011 demanding differential duty of Rs.1,52,83,090/- for the clearance made during December 2007 to January 2009. On adjudication, the demand was confirmed along with interest

and penalty. Hence, the present appeal.

4. At the outset, the learned advocate for the appellant has submitted that they are engaged in the export of coffee and spices under target plus scheme. Since the said coffee and spices exported were packed in PP/HDPE bags, they have imported PP/HDPE/LDPE granules through high sea sales using the TPS scrips. The custom duty liability was debit