Paragraph numbers below are the court’s original numbering, recovered from the source text.
7. The CEGAT found that the tenns of remand were specific. The order of remand so far as relevant reads as follows: "The last contention urged is that during a substantial part of the dispµted period, duty chargeable on the finished products of the B appellant was nil rate of duty either on account of Board order, dated 5.5.1989 or on account of exemption Notification No.49/87, dated 1.3 .1987. These contentions have not been raised before the Adjudicating Authority who, therefore, did not have the opportunity to apply his mind in this regard. Though these contentions have not C been raised before the lower authority, we are inclined to grant the appfllant permission to raise these contentions at this stage. Consideration of these contentions would require reference to the approved classification lists and the description of the goods covered by the Board's order and the notification and also require factual investigation. In this view, this controversy should be decided by the D Adjudicating Authority."
8. Leamedicounsel for the appellant submitted that the remand was an open one and not a limited one. Therefore, the view expressed is not correct. It was submitted that the penalties imposed were higher.
9. Learned counsel for the respondents supported the impugned orders.
10. A bare reading of para I 0 makes the position clear that it only related to the particular plea and no other plea which was covered by para 8. The scope of limited remand has been highlighted by this Court in Mohan Lal v. F Anandibai and Ors., AIR ( 1971) SC 2177. It was observed at para 9 as follows: "9. Lastly, counsel urged that now the suit has been remanded to the trial Court for reconsidering the plea of res judicata, the appellant should have been given an opportunity to amend the written statement so as to include pleadings in respect of the fraudulent nature and G antedating of the gift deed Ext. P-3. These questions having been decided by the High Court could not appropriately be made the subject-matter of a fresh trial. Further, as pointed out by the High Court, any suit on such pleas is already time-barred and it would be unfair to the plaintiff-respondents to allow these pleas to be raised by H amendment of the written statement at this late stage. In the order, the . '' c [2007) 8 S.C.R. High Court has stated that the judgments and decrees and findings of both the lower courts were being set aside and the case was being remanded to the trial Court for a fresh decision on merits with advertence to the remarks in the judgment of the High Court. It was argued by learned counsel that, in making this order, the High Court has set aside all findings recorded on all issues by the trial Court and the first appellate Court. This is not a correct interpretation of the order. Obviously, in directing that findings of both courts are set aside, the High Court was referring to the points which the High Court considered and on which the High Court differed from the lower courts. Findings on other issues, which the High Court was not called upon to consider, cannot be deemed to be set aside by this order. Similarly, in permitting amendments, the High Court has given liberty to the present appellant to amend his written statem~nt by setting out all the requisite particulars and details of his plea of res judicata, and has added that the trial Court may also consider his prayer for allowing any other amendments. On the face of it, those other amendments, which could be allowed, must relate to this very plea of res judicata. It cannot be interpreted as giving liberty to the appellant to raise any new pleas altogether which were not raised at the initial stage. The other amendments have to be those which are consequential to the amendment in respect of the plea of res judicata."
11. Above being the position, there is no merit in these appeals which are dismissed, so far as levy of duty is concerned. However, considering the factual scenario the penalty is reduced to Rs.5 lakhs from Rs. I 0 lakhs.
12. So far as appeal No.7098 of2005 is concerned, the primary stand is that the Commissioner at Hyderabad has accepted the stand of the assessee- appellant. But it appears in the instant case the admitted position was that there is a separate charge. CESTA T's order makes the position clear. The relevant portion of CEST AT order reads as follows: (ii) With reference to show cause notice dated 23.6.1994, the reply vi de letter dated 26 July 1994 (Page 159). It was stated that the printing cylinders are manufactured by them in their factory i.e. M/s. Hello Gravure out of different materials and are incorporated with their various customers' motifs or designs. The printing cylinders cannot – .be considered as an input of flexible packaging laminate and its value cannot be included in the value of the flexible packaging laminate. _,,… PAPER PRODUCTS LTD. 1·. COMMNR. OF CENTRAL EXCISE, MUMBAI [PASA Y AT,J.} 32 J (iii) In respect of show cause notice dated 5. I 0.1994 vide their letter A dated 14.11.1994 (Page 164) it was stated that the charges for making printed cylinders are collected by them for Mis. Helio Gravure to whom these charges accrue and are shown in their books. They cannot obviously collect these charges in their invoices as these charges do not form part of cost of flexible packaging but they are part of cost of printing cylinders. They further stated the costs for B artwork design and development of cylinders, which were reimbursed to them by their customers and accrue in the books of Mis. Helio and are incurred by their customers and not by them and therefore these costs are not to be included in the manufacturing cost. XX XX JO<: XX (vi) In respect of show cause notice dated 8.9.1995, vide reply dated 26th September, 1995 (Page 173) they submitted that cost of making printed cylinder is divided into two types of costing: c (a) Cylinder per se, which is made of metal i.e. copper, is the D property of Mis Helio Gravure. The cost of the metal cylinder is amortized in the flexible packaging laminate products. (b) Amortization is also done for the Artwork and the design work that are incorporated in the Cylinder."
13. It is to be noted that the Commissioner had adjudicated 23 show cause notices covering the period from 7.9.1993 to 31.3.2000. Earlier these notices were adjudicated vide Order in Original No.3112001 Commr.M VI dated 3.10.2001 against which Appeal No.El568102 Mum was filed. The appeal was disposed of by the CEGA T with the following observations: "The counsel of the appellant contends that identical issue, the inclusion in the cost of manufacture of finished goods i.e. printed plastic sheets, the cost of cylinders and a part recovery from the buyers, has already been considered by the Tribunal in Flex Industries Limitedv. CCE, (1997) 91 ELT 120. He says that the Commissioner has not considered the cost sheets duly attested by the cost accountant, G which was produced in support of its contention. We have seen copies of these cost sheets. While the Commissioner has concluded in his order that no evidence of amortization was furnished before him, it appears that he has not considered these cost sheets. We therefore propose to remand the matter to hirrt for this purpose. In this H (2007) 8 S.C.R. process, the appellant shall be entitled to address the Commissioner on the issues raised in the notices and advance arguments in support. The department is also at liberty to advance submissions before the Commissioner. The Commissioner shall thereafter pass orders on the issues raised in the notices in accordance with law."
14. The stand seems to be that separate charge was made after Flex c Industries case. The finding of CEST AT is to the following effect: "From the perusal of various replies to the show cause notice submitted by the appellant, as pointed out by the Jt. CDR, it is apparent that the appellant has changed its stand from time to time. At times a plea has been taken these charges are not includible due to the fact these are reimbursed by the customers being the printing cylinder cost, and at times plea has been taken that those charges are not towards cost of the cylinders but for maintenance of printing cylinder."
15. That being so, the demand as levied does not suffer from any infirmity. But so far as penalty under Rule 173Q is concerned the same appears to be on the higher side. Considering the background facts the quantum of penalty is reduced from Rs. I crore to Rs.50 lakhs.
16. The appeals are disposed of accordingly. B.B.B. Appeals disposed of. f 4';