Case Law Details
C.C.E.-Ahmedabad-ii Vs Leamak Healthcare P Ltd (CESTAT Ahmedabad)
CESTAT Ahmedabad held that imposition of penalty without granting an opportunity of being heard is against the principles of natural justice and accordingly cannot be sustained.
Facts-
M/s. Leamak Healthcare P Ltd. (LHL) are engaged in the manufacture of confectionary items on behalf of M/s. ITC Ltd. on job work basis. As per the agreement entered between LHL and ITC, the packing material has been supplied by ITC and the goods manufactured by the LHL were handed over to ITC at factory gate. The LHL was paying Central excise duty on the value arrived at on the basis of raw material cost plus packing material cost plus conversion cost. Prior to June, 2005 the LHL was discharging duty on MRP basis under Section 4A of the Central Excise Act, 1944.
A show cause notice was issued by revenue alleging that ITC and LHL have interest directly or indirectly in the business of each other and therefore, the two are related in terms of Section 4(3)(b) of the Central Excise Act, 1944 and therefore, the assessable value should be governed by Rule 9 of Central Excise Valuation (Determination of Price of Excisable goods) Rules, 2000.
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