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2024 (4) TMI 1088 - CESTAT KOLKATAMethod of valuation - goods transferred to another unit for captive consumption - to be valued in accordance with Rule 8 of the Valuation Rules or under Rule 4 - revenue neutrality - Extended period of limitation - maintainability of SCN in the absence of challenge of final assessment order. Whether the appellant has paid the duty correctly in accordance with Rule 8 of the Valuation Rules or the appellant is liable to pay duty in terms of Rule 4 of the Valuation Rules? - HELD THAT:- The Circular No.692/8/2003-CX dated 13.02.2003 clarified the position that the cost of production of captively consumed goods will be done strictly in accordance with CAS-4. Admittedly, in this case also, the appellant has adopted the above said Circular and was paying duty as per CAS-4 in terms of Rule 8 of the Valuation Rules - the fact is further noted that the Circular dated 13.02.2003 on the basis of which the appellant paid the duty is binding on the Revenue as held by the Hon’ble Apex Court in the case of Ratan Melting and Wire Industries [2008 (10) TMI 5 - SUPREME COURT] - thus, the appellant has correctly paid the duty on the goods in question, which has been captively consumed by the sister unit for manufacturing of excisable goods in terms of CBEC Circular No.692/8/2003-CX dated 13.02.2003. On merit, the appellant has rightly paid the duty as per CAS-4 in terms of Rule 8 of the Valuation Rules - thus, Rule 4 of the Valuation Rules, is not applicable in the facts and circumstances of the case. Whether the extended period of limitation is invokable or not? - HELD THAT:- For the period from April, 2009 to November, 2013, a show-cause notice was issued on 22nd December, 2015 is barred by limitation as the appellant has not suppressed any facts from the Department while paying duty and on finalization of provisional assessment, Therefore, this issue is answered in favour of the appellant. Whether it is a case of revenue neutrality or not? - HELD THAT:- The appellant is clearing the goods in question to their sister unit, who is entitled to take the cenvat credit itself. In that circumstances , we hold that it is a revenue neutral situation as held by this Tribunal in the case of M/S. HINDALCO INDUSTRIES LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, BHUBANESWAR-II [2023 (5) TMI 720 - CESTAT KOLKATA], wherein this Tribunal has observed as the entire exercise would be revenue neutral, there is no loss of revenue to the exchequer - thus, it is a revenue neutral situation. On this count also, the appellant is not liable to pay differential duty as adjudicated by the adjudicating authority. Whether in the absence of challenge of final assessment order, a show-cause notice issued to the appellant is maintainable or not? - HELD THAT:- Admittedly, in this case, during the impugned period, the appellant cleared the goods provisionally paying duty and all the provisional assessments have made final and the said final assessments have been accepted by the Revenue. In that circumstances, without challenging the said final assessment, the Revenue cannot proceed to issue of showcause notice to the appellant - the show-cause notice was not required to be issued without challenging the order of final assessment of the provisional assessments. The demand of duty is not sustainable against the appellant. Consequently, no penalty is imposable on the appellant. The impugned order is set aside - appeal allowed.
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