T.K. Jayaraman, Member (T)

1. M/s. Paro Food Products, 19-4-280/1, Mir Sagar Village, Mir Alam Tank Road, Rajendranagar Mandal, R. R. District (A.P.), (hereinafter referred to as appellant) are job workers manufacturing biscuits for M/s. Adarsh Industries, Hyderabad. The issue is with regard to the valuation of the goods manufactured by the appellants for the period from 22-11-92 to 31-3-96. The adjudicating authority in the impugned order No. 4/99, dated 17-1-2000 has confirmed the demand of Rs. 48,46,194/-. Further a penalty of Rs. 15,00,000/- has been imposed under Rule 173Q(1). The plant and machinery of the appellant have been confiscated under Rule 173Q(2). An option to redeem the plant and machinery has been given on payment of fine of Rs. 2,00,000/-. The appellant has strongly challenged the finding of the adjudicating authority.

2. Shri Laxminarayan Goyal, learned Consultant and Shri T. Ramesh, learned Advocate appeared on behalf of the appellants and Shri L. Narasimha Murthy, learned SDR appeared on behalf of the Revenue.

3. The learned Consultant brought to the notice of the Bench that the same issue has been decided by the Assistant Commissioner in his adjudication Order No. 60/97, dated 11-8-97 for the same period and for the same amount. In these proceedings, the Assistant Commissioner, inter alia, dropped the demand on the ground that the price lists which have been approved by the Department are not provisional but final. He was not in a position to confirm the demand. The Revenue was aggrieved over that portion of the Assistant Commissioners order dropping the demand and has gone in an appeal to the Commissioner (Appeals) to declare that price lists are only provisional. The proceedings before the Commissioner (Appeals) have not been decided. In these circumstances, it was not correct, urged the learned Advocate, that the Commissioner should have issued another show cause notice for the same amount and for the same period by invoking longer period. He said that the principle of res judicata is clearly applicable to the present case. He relied on a number of decisions. He maintained that a second show cause notice for the extended period cannot be issued for the same amount, for the same facts and for the same period. It was further urged that the parallel proceedings on contradictory ground is bad. The case before the Commissioner (Appeals) is for treating the price lists as provisional and the present case before the Tribunal is for suppression of facts. The grounds are in contradiction in each other. He also cited a number of case laws to show that no demand is sustainable merely on the basis of balance sheet. He stated that no statement has been recorded either from the appellants principal nor the appellants. Further he pleaded that as per Advani Oerlikon Limited case [1991 (55) E.L.T. 486 (Bom.)], cost accountant certificate can be relied and not the balance sheet of the customer.

4. The learned SDR submitted that the Assistant Commissioner dropped the proceedings on the ground that he was not competent to decide the matter invoking extended period. He did not drop the proceedings on merit. Under these circumstances, there is nothing wrong in the Commissioner issuing a show cause notice invoking extended period on account of suppression of facts. Hence, he urged the Bench to uphold the Order-in-Original.

5. We have gone through the records of the case carefully. The Assistant Commissioner dropped the proceedings on the ground that the price lists were not provisionally approved, but have become final. There is no indication from the records that the appellants had suppressed any facts. In fact, based only on the balance sheet of the appellants principal the demand was made. In the second show cause notice issued by the Commissioner, the amount of demand is exactly same for the same period. This demand is also based on the balance sheet of the principal. In other words, after the conclusion of the first proceedings initiated by the Assistant Commissioner, no new development took place. There was no seizure of any new document. All the documents which were available during the first proceedings formed the basis of the second proceedings. In the first proceedings, the Assistant Commissioner has dropped the demand. Against the Assistant Commissioners order, the Revenue has gone in appeal which is yet to be decided. Under these circumstances, we strongly feel that there is no point in the Commissioner initiating a second proceedings for the same period and for the same amount invoking longer period. There is no suppression of facts. So, longer period is ruled out. In that case, the demand is time barred. We also hold that the principle of res judicata is applicable. The Honble Supreme Court in the case of Devilal Modi v. Sales Tax Officer, Ratlam and Ors. [AIR 1965 Supreme Court 1150 (V 52 C ISI)] has held that in a case where assessment to sales tax for particular year challenged on some grounds by writ petition which was dismissed on merits, subsequent writ petition challenging same assessment order, on additional grounds cannot be entertained as the principle of constructive res judicata is applicable to the writ petition. The Tribunal in the case of Commissioner of Central Excise, Bangalore v. Andhra Steel Corporation Ltd. [2002 (145) E.L.T. 567 (Tri. - Bang.)] held that repeated show cause notice for the same period after the case has been dropped by the Assistant Commissioner is hit by res judicata and no new material has come into the hands of the Revenue. The Tribunal in the case of Commissioner of Central Excise, Indore v. Siddharth Tubes Ltd. [2004 (170) E.L.T. 331 (Tri. - Del.) has held that the issuance of a second show cause notice on the same issue and period after gathering additional information/material cannot be issued when one has already been issued earlier. Similar view has been held in the case of Nestle India Ltd. v. CCE, Chandigarh-II [2004 (176) E.L.T. 314 (T) = 2004 (63) RLT 586 (CESTAT - Del.)]. Another important point should be borne-in-mind by the Revenue. It is possible that show cause notice for demand can be issued on several grounds say A, B, C, etc. When proceedings are initiated, the Revenue should take into account all the grounds. They cannot issue show cause notice on one ground, A. conclude the proceedings and latter cannot issue another show cause notice on another ground, B. for the same period and so on. If this is allowed, then there would not be an end to the number of proceedings against a party. This is definitely against the public policy. In this connection we would like to recall maxim - "Res judicata pro ventate accipitar - A matter adjudged is taken for truth. A matter decided or passed upon by a court of competent jurisdiction is received as evidence of truth". - (Blacks law Dictionary)

6. We also observe that the case before us is on account of suppression of facts. The parallel proceedings before the Commissioner (Appeals) is for treating the price lists as provisional. In the following decisions, it has been held that the parallel remedies on the same matter cannot be pursued at the same time :-

(i) : 1977(1) SCC 1

(ii) 1999 BC 452 (Patna)HC

In the following decisions, it has been held that no demand is sustainable which is based merely on balance sheet :-

(i) 1999 (107) E.L.T. 107 (Tri.)

(ii) 1993 (68) E.L.T. 368 (Tri.)

(iii) 2004 (62) RLT 626 (Tri. - Del.)

7. In view of the above observations, the Order-in-Original has no merit. The same is liable to be set aside. This order is without prejudice to the proceedings before the Commissioner (Appeals) against the Assistant Commissioners order. The Commissioner (Appeals) may decide the issue without influenced by our observations in this order. For the reasons stated above, we allow the appeal.