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2022 (5) TMI 865 - AT - Central ExciseValuation of goods - method of valuation - sale of goods from depot / customer care center - excisable goods cleared/stock transferred to their Unit No. 2/Customer Care Centre from where the goods are sold to unrelated buyers without carrying out any manufacturing activity - applicability of Rule 11 read with Rule 7 or Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000? - invocation of extended period of limitation - penalty - HELD THAT:- Issue whether the process of packing the excisable goods manufactured by the appellant along with the other bought out items in a carton and sold as “Cable Jointing Kit” was considered in case of XI TELECOM LIMITED VERSUS SUPERINTENDENT OF C. EX., HYDERABAD [1998 (2) TMI 137 - HIGH COURT OF JUDICATURE FOR ANDHRA PRADESH AT HYD] where it ws held that placing different articles in the kit does not amount to manufacture. If once the activity of placing the articles in the kit does not amount to manufacture, the provisions of the Act are not applicable as the levy of excise duty is on the production and manufacture of goods. In the present case the counsel for the appellant urge, that the appellant have consumed the goods cleared by them from their manufactory to their depot and from their depot they have cleared these goods cleared from the factory along with other bought out items, packed together in a carton as “cable jointing kit”. It is evident from the order of the Hon’ble High Court of Andhra Pradesh, that the “cable jointing kit” is an excisable good classifiable under heading 85.47 of the First Schedule to Central Excise Tariff Act, 1985, however the same cannot be subjected to excise duty as the activities undertaken do not amount to manufacture and hence will be excluded from the purview of Section 3 of the Central Excise Act, 1944. Since, the finding of the Commissioner in the impugned order that the goods cleared from the factory of the appellant were not consumed captively in production of the finished goods, is agreed upon, Rule 8 of valuation Rules will not be applicable. Undisputedly the appellants have offered the goods for sale for the first time in normal course of trade at depot only, which are their fully owned service centers. The actual place of removal as per the definition of place of removal, as section 4, as have been interpreted by the Hon’ble Apex Court umpteen number of times has to be the depot only. Even if the arguments of the appellant are accepted, then also in view of the decisions of Hon’ble Apex Court specifically in case of SIDHARTHA TUBES LTD. VERSUS COLLECTOR OF CENTRAL EXCISE [1999 (11) TMI 69 - SUPREME COURT], the value will be determined only on the basis of sale price from depot. It is found that the form in which the goods have been sold at depot are in package comprising of the goods cleared from the factory of appellant and other bought items packed together in a carton. Hence the sale price of the goods comprise of the sale price of the goods manufactured by the appellant and the sale price of the goods trade by the appellant. Time Limitation - HELD THAT:- Undisputedly all the facts were in the knowledge of the revenue and in fact have been corresponded between the revenue and appellant since 1993. For the clearance of the said goods either by adopting the value determined on the basis of cost construction method prior to 1994, appellants would have filed Price List as per Rule 173 C of the erstwhile Central excise Rules, 1944 and thereafter price declarations with the department. These price lists would have been considered and approved by the appropriate authorities throughout. Commissioner does not deny the correspondences between the appellant and the revenue since 1993 on the issue. When the entire issue was in knowledge of the revenue since 1993, invoking extended period of limitation in the present case is not correct. Penalties - HELD THAT:- In the issues relating to interpretation of the provisions of the Central Excise Act, 1944 and the Rules made thereunder, consistently it has been held that a change of view in the interpretation of the provisions of the statue and adopting a view that is contrary to the view adopted earlier as a matter of long standing practice, the revenue the appellant cannot be faulted and penalties imposed under Rule 25 too cannot be sustained - Commissioner has imposed penalty on the appellant 2 under Rule 26, the same cannot be sustained. Appeal allowed in part to the extent of setting aside the demands beyond the normal period of limitation and setting aside the penalties imposed on the appellants.
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