Case Law Details
The Supreme Court has set aside the penalty demanded by the excise authorities from Pepsi Foods Ltd because there was no intentional default on the part of the company. But the court overruled the excise tribunal on the question of inclusion of freight charges between Pepsi factory and Frito-Lay India. Till 1998, the company was selling its food products to Frito-Lay India, said to be a ‘related person’. Pepsi maintained that the sale occurred at its factory gate for purposes of excise duty. The authorities considered the price at which wholesalers got the goods from Frito-Lay. In this dispute, the commissioner held that the freight charges between the Pepsi factory and Frito-Lay unit should be included in the sale price. On appeal, the tribunal ruled that the freight should be excluded. The court stated that in situations where the assessees sold its goods to a related person, “It was prudent to understand that the price in such a sale would be deliberately understated so as to evade tax. It was to dissuade such sales that the legislature had decided to deem the price of the goods at the time of their sale by related persons to wholesale markets.”
J U D G M E N T
GANGULY, J.
1. These statutory appeals (Civil Appeal Nos. 1921-1923 of 2003) have been filed under Section 35-L (b) of the Central Excise Act, 1944 (the Act), against the judgement and final Order No. 353-355/2002-A, dated 8th August, 2002, passed by the Customs, Excise and Gold (Control) Appellate Tribunal, Bench-A, New Delhi.
2. The material facts are that the respondent assessee, M/s. Pepsi Foods Ltd. is engaged, inter alia, in the manufacture of edibles, marketed under the names of Potato Chips, Baked Cheetos Balls, Monster Munch, etc. These are covered under Chapter Sub-Headings 2001.10 and 1904.10 of the Central Excise Tariff Act, 1985 (Act 5 of 1986). Uptill 12th January, 1998, as much as 96% of these products manufactured by the respondent, were sold to M/s. Frito-Lay India, a ‘related person’, and the balance of 4% were sold to independent wholesale buyers. From 12th January, 1998, the sale pattern between the two was changed, wherein M/s. Pepsi Foods Ltd. started manufacturing the aforesaid products on behalf of M/s. Frito-Lay India.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
I have deposited Advance tax in Axis bank by cheque for f.y. 2008-09. But the acknowledgement receipt missed by me by mistake. How can I get the acknowledgement by internet or Axis bank.