Eveready Industries India Ltd. Vs Commissioner (Allahabad High Court)
Summary: The Customs, Excise & Service Tax Appellate Tribunal, Allahabad Regional Bench, Court No. II, partly allowed two appeals filed by M/s Eveready Industries India Ltd. concerning valuation of primary cells and batteries supplied to M/s PMS Flashmatics Pvt. Ltd., Haridwar and M/s Elin Electronics Ltd., Solan. The first appeal was Excise Appeal No. 71114 of 2018 and the connected appeal was Excise Appeal No. 70395 of 2021. The Tribunal decided the appeals on 01.09.2026.
The appellant manufactured primary cells and batteries classifiable under Heading 85061000. During audit, the Revenue noticed that identical batteries were cleared to PMS and Elin at prices lower than the values adopted for identical batteries transferred to Eveready’s own Lucknow unit under CAS-4. The batteries supplied to PMS and Elin were used for co-packing with torches manufactured according to Eveready’s specifications, with the co-packed products subsequently sold back to Eveready. The Revenue considered the contractual prices unreliable and alleged mutuality of business interest and related-party status.
The first show cause notice dated 05.08.2016 covered November 2013 to November 2014 and demanded Rs. 44,47,291, besides interest and penalty. A further notice dated 03.12.2016 covered December 2014 to March 2016 and proposed demand of Rs. 47,48,685. The adjudicating authority ultimately confirmed aggregate duty of Rs. 91,96,976 for November 2013 to March 2016 with interest and an equivalent penalty. A later statement of demand for 2016-17 and part of 2017-18 resulted in another confirmed demand of Rs. 45,04,530 with interest and penalty.
