The Tribunal held that a duty demand reduced during de novo proceedings is sustainable if the adjudication authority followed remand directions and the Revenue provided no additional evidence to prove undervaluation, regardless of general principles established in other cases.

PER: P.A. AUGUSTIAN

The issue in the present appeal is regarding valuation of the goods manufactured by the Respondent. The Appeal is filed by the Revenue challenging the impugned order dropping the substantial part of the demand made as per the Show Cause Notice (SCN) and also for imposing lesser amount of penalty than the penalty imposed by original authority while adjudicating the issue in the earlier proceedings.

2. The brief facts are the Respondent, M/s Fathima Panels, Ltd., is manufacturing plywood, block boards, etc., Alleging undervaluation, proceedings were initiated and Show Cause Notice (SCN) was also issued on 11.10.2006 for the period from 01.07.2001 to 31.03.2004. A Show Cause Notice (SCN) was also issued to Shri. Abdul Salam, In-charge of M/s. Fathima Pannels Ltd, Shri. J.M Ashraf, Manager of M/s. Fathima Panels Ltd and Shri. C. Manoj Kumar Ameen, Marketing Executive of M/s. Fathima Panels Ltd., alleging abetment and proposing penalty under Rule 26 of the erstwhile Central Excise (No.2) Rules, 2001. Thereafter, Adjudication authority as per Order-in-Original dated 30.03.2007 confirmed the demand of differential duty of Rs. 49,73,107/- and imposed equal amount of penalty under Section 11AC of the Central Excise Act, 1944 and Rs. 2 lakhs under Rule 25 Adjudication Authority also imposed penalty of Rs. 2 lakhs each on other noticees under Rule 26 of the erstwhile Central Excise Rules, 2001/2002. Aggrieved by said order, Appeals Nos. E/612/2007, E/613/2007, E/616/2007 and E/617/2007 were filed before this Tribunal and they were disposed vide Final Order Nos. 1513 to 1516/10 dated 08.12.2010 by setting aside the order and remanded the matter to the adjudicating authority for a fresh decision in respect of the duty liability and penal liability of the assessee as also the penal liability of the concerned individuals.

3. The above Final Order was not accepted by the department and Civil Appeal No.5527-5530/2011 was filed by the Department before the Hon’ble Supreme Court and consequent to issue of Circular dated 11.07.2018 the department applied for withdrawal of the said appeal on account of monetary limits. Accordingly, considering the Final Order No. 1513-1516/2010 dated 08.12.2010, denovo proceedings were conducted and after following direction of this Tribunal which was upheld by the Hon’ble Supreme Court, Adjudication Authority restricted the demand as per the evidences available on record and duty demand was reduced to Rs. 57,514/- and equal penalty was also imposed on appellant under Section 11AC and penalty of Rs. 50,000/- under Rule 25 of the Central Excise Rules, 2002. Similarly, penalty of Rs. 50,000/- each was imposed on other noticees under Rule 26 of the Central Excise Rules, 2002. Aggrieved by said order, dropping the substantial demand present appeal was filed by the Revenue.

4. When the appeal came up for hearing, Learned Authorized Representative (AR) for the Revenue reiterated the findings in the grounds of appeal and submits that against the first Order-in-Original, substantial demand was dropped and further submits that in the similar case of M/s. CERA Boards and Doors Vs. CCE, Calicut reported in 2020 373 ELT 794 (SC), Hon’ble Supreme Court directed that if any particular dealer or customer has paid consideration over and above what is reflected in the invoice, the additional payment made by him together with the invoice value shall be taken to be the transaction value, for all the transactions that the particular dealer/customer had with the assessee. In simple ter