Bombay High Court
Bombay High Court

Mumbai: In a relief to Supermax Personal Care Pvt Ltd, a firm involved in manufacturing and selling Supermax razor blades, the Bombay High Court quashed a show cause cum demand notice issued by the GST Commissionerate, Thane demanding over Rs 44.88 crores excise duty for the years 2015-16 to 2017-2018 (up to June 2017).

The bench of Justices Ujjal Bhuyan and Milind Jadhav were hearing a plea filed by Supermax Personal Care Pvt Ltd through its counsel Prakash Shah, challenging the show cause cum demand notice issued to it for allegedly evading to pay the excise duty.

The contention of the GST commissioner was that Supermax Personal Care Pvt Ltd had roped in Tigaksha, another firm to process its products and even package the same at its factory at Una in Himachal Pradesh. This firm sends the completed products to various depots of Supermax across the country, from where they are sold to consumers.

Notably, Tigaksha enjoys an area-based exemption from paying excise duty.

The GST Commissionerate argued that since Supermax Personal Care Pvt Ltd gets excisable products through Tigaksha, which assembles the products and even finalises the packaging work, it ought to pay the levied excise duties. It argued that the Supermax Personal Care Pvt Ltd cannot evade paying the tax claiming that it is the principal manufacturer and not the Tigaksha.

In its defence, Supermax Personal Care Pvt Ltd through advocate Shah pointed out that the final product is sold from its sales depots across the country. It argued that the product wasn't sold from the end of Tigaksha, which enjoys area based exemption.

Shah cited a similar proceeding issued against his clients in 2018, where the adjudicating authority (Commissioner of GST) had withdrew the show cause cum demand notice on the ground that Supermax Personal Care Pvt Ltd was the only principal manufacturer of the final products and not Tigaksha.

"Till such time the retail packed blades were not sold from the sales depot of Supermax, the firm as the principal manufacture had the responsibility of discharging the liability in respect of central excise duty leviable and payable on the final products," the bench noted, while quashing the impugned notice.

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