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CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL

CHENNAI

REGIONAL BENCH – COURT No. III

Excise Appeal No. 41357 of 2016

(Arising out of Order-in-Original No. 01/2016(CE) dated 06.01.2016 passed by Commissioner

of Central Excise, No. 26/1, Mahatma Gandhi Road, Nungambakkam, Chennai – 600 034)

Commissioner of GST and Central Excise ...Appellant

Chennai North Commissionerate,

No. 26/1, Mahatma Gandhi Road,

Nungambakkam,

Chennai – 600 034.

Versus

Mr. Universal Colours India Pvt. Ltd. ...Respondent

No. 22/1N, Attuputhur Village & Post,

Kanchipupram – 631 561.

APPEARANCE:

For the Appellant : Mr. M. Selvakumar, Authorised Representative

For the Respondent : Mr. Jaikumar, Advocate

CORAM:

HON’BLE MR. P. DINESHA, MEMBER (JUDICIAL)

HON’BLE MR. VASA SESHAGIRI RAO, MEMBER (TECHNICAL)

FINAL ORDER No. 40192 / 2026

DATE OF HEARING : 12.12.2025

DATE OF DECISION : 04.02.2026

Per Mr. VASA SESHAGIRI RAO

This appeal has been filed by the Department

against Order-in-Original No. 01/2016-CE dated 06.01.2016,

passed by the Commissioner of Central Excise, Chennai III

Commissionerate, whereby the demand of Central Excise

duty amounting to ₹1,18,40,175/- pertaining to the

extended period of limitation was dropped on the ground

that invocation of the extended period of limitation under the

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proviso to Section 11A of the Central Excise Act, 1944 was

not sustainable, while confirming duty of ₹17,13,395/- for

the normal period along with interest and imposing penalty

under Section 11AC(1)(a) of the Act.

1.2 The respondent, M/s. Universal Colours India

Pvt. Ltd., Kanchipuram is engaged in the manufacture of

stamp pads (small and medium) falling under CETH 9612 20

00, bearing the brand name “Faber-Castell”, owned by M/s.

A.W. Faber-Castell India Pvt. Ltd. The respondent was

registered with the Central Excise Department with effect

from 16.05.2011 and was availing SSI exemption under

Notification No. 08/2003-CE dated 01.03.2003.

1.3 During Internal Audit conducted in September

2014, it was noticed that stamp pads falling under Heading

9612 are notified goods under Section 4A of the Central

Excise Act, 1944 vide Notification No. 49/2008-CE (NT)

dated 24.12.2008, and were cleared in retail packages with

MRP affixed. However, the respondent had assessed duty by

adopting transaction value under Section 4, instead of MRP-

based valuation under Section 4A.

1.4 On this basis, Show Cause Notice No. 09/2015

dated 06.04.2015 was issued proposing to: a)Re-determine

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assessable value under Section 4A, b) Demand differential

duty of ₹1,35,53,570/- for the period March 2010 to

September 2014 by invoking the extended period, and c)

Impose penalty under Section 11AC.

1.5 The adjudicating authority, vide Order-in-

Original No. 01/2016-CE dated 06.01.2016, held that: -

i. Extended period of limitation was not invokable in the

absence of willful suppression;

ii. Demand for the extended period March 2010 to

February 2014 amounting to ₹1,18,40,175/- was

dropped;

iii. Demand of ₹17,13,395/- for the normal period (March

2014 to September 2014) was confirmed along with

interest; and

iv. Penalty of ₹1,00,000/- was imposed under Section

11AC(1)(a).

2. Aggrieved by dropping of the demand for the

extended period, the Department has filed the present

appeal.

3. The Ld. Authorized Representative Mr. M.

Selvakumar, appeared for the Appellant-Department and the

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Ld. Advocate Mr. Jaikumar, appeared for the

Respondent/Assessee.

4.1 The Learned Counsel appearing for the appellant

submitted that the adjudicating authority erred in holding

that extended period is not invokable. It was contended

that: -

i. Though the respondent declared classification under

CETH 9612, they never disclosed that valuation was

being done under Section 4 instead of Section 4A.

ii. Mere declaration of tariff heading does not

automatically convey the method of valuation,

particularly when Legal Metrology (Packaged

Commodities) Rules, 2011 provide exemptions in

certain cases.

iii. The respondent did not explicitly declare whether the

goods were sold to industrial/i