TMI Blog2017 (12) TMI 162X X X X Extracts X X X X X X X X Extracts X X X X ..... is more than the duty payable by the appellant, the case falls under the category of revenue neutrality, hence, no demand will sustain - Since we have taken a view that demand is not sustainable on revenue neutrality, we need not go to other aspect of valuation of goods - appeal allowed - decided in favor of appellant. - E/400/08 - A/91015/17 - Dated:- 30-11-2017 - Shri Ramesh Nair, Member (Judicial) And Shri Raju, Member (Technical) Shri S.A. Gundecha, Advocate for the appellant Shri M.R. Melvin, Supdt. (AR) for the respondent ORDER Per: Ramesh Nair The dispute involved in this case is relating to the valuation of goods manufactured and cleared to their own unit of the appellant. The appellants have valued the goods on cost construction method in terms of Rule 8 of Central Excise Valuation Rules, 2000. The case of the department is that the appellants have not arrived at correct cost of manufacture of goods. The appellant vide letter dated 05.10.2003 stated that they had worked out the assessable value of these goods in terms of Rule 8 of the Valuation Rules, 2000 i.e. actual material cost plus processing cost plus 15% profit on total cost of productio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Jay Yuhshin Ltd. - 2000 (119) ELT 718 (T-LB) PTC Industries Ltd. - 2003 (159) ELT 1046 (T-Del) CCE vs. Textile Corpn. Marathwada Ltd. - 2008 (231) ELT 195 (SC) Daman Ganga Board Mills Pvt. Ltd. - 2012 (276) ELT 532 Wolfra Tech (P) Ltd. vs. CCE - 2012 (284) ELT 89 Alembic Ltd. - 2014 (308) ELT 535 Trinity Dic Forgers Ltd. - 2017 (348) ELT 276 Castwell Metal Industries - 2001 (137) ELT 161 3. He further submits that in the facts and circumstances, penalty is not imposable as there is no mensrea on the part of the appellant as held by the Hon'ble Supreme Court in the case of CCE vs. Pepsi Foods Ltd. - 2010 (260) ELT 481 (SC). 4. Shri M.R. Melvin, Ld. Supdt. (AR) appearing on behalf of the revenue reiterates the finding of the impugned order. He also placed reliance on the judgement of Hon'ble Supreme Court in Star Industries - 2015 (324) ELT 656 (SC). 5. We have carefully considered the submission made by both sides and perused the records. After hearing both sides, we find that this matter can be disposed of on the issue of revenue neutrality itself. We find that the issue involved is only corre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 214/86 was concurrently available to them and therefore no intention to evade duty payment can be inferred does not appear to merit acceptance since it is not in dispute that the appellants were admittedly availing of modvat credit under Rule 57A and Rule 57Q. There is also no evidence on record to show that MUL had given any undertaking under Para 2 of Notfn. No. 214/86 in relation to the manufactured items sold by the appellants to MUL. The said defence cannot therefore be accepted for want of factual substantiation. As regards the contention of the appellants that the SCN issued under Section 11A(1) would apply only to a situation where a duty payment is subsisting at the time of issue of notice and where no such outstanding duty liability exists at the time of issuing the SCN, we are of the view that a careful reading of Section 11A(1) does not allow such a construction to be put on the said provision. Inasmuch as Section 11A(1) gives power to the Central Excise Officer to serve a notice within a period of six months from the 'relevant date from the date when non-levy/non-payment or short levy/short payment has occurred, we are of the view that so long as it is not in dou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e would not be an acceptable defence; (c) With particular reference to Modvat scheme (which has occasioned this reference) it has to be shown that the Revenue neutral situation comes about in relation to the credit available to the assessee himself and not by way of availability of credit to the buyer of the assessee's manufactured goods; (d) We express our opinion in favour of the view taken in the case of M/s. International Auto Products (P) Ltd. (supra) and endorse the proposition that once an assessee has chosen to pay duty, he has to take all the consequences of payment of duty. Hon'ble Supreme Court in the case of Textile Corpn. Marathwada Ltd. (supra) also dealing with the issue of revenue neutrality passed the following order:- The point involved in the present case is as to whether the facilities in the factory of the assessee-respondent for carrying out bleaching, dying, printed and mercerising of textile fabrics would invite levy of excise duty at each stage of manufacture. 2. The Tribunal by its impugned order has accepted the appeal of the assessee and set aside the orders of the Commissioner (Appeals) and Assistant Commissioner le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly paid by Garauli unit on sale price of the goods. The Larger Bench's decision of the Tribunal in Jay Yuhshin Ltd. v. CCE (supra) supports the case of the appellant as in the present case also the transaction is of revenue neutrality. 5. As per the above discussion, the demand confirmed and upheld by the lower authorities is not sustainable. The impugned order is set aside and the appeal is allowed. 6. As regards the judgment of Star Industries (supra) relied upon by the Ld. AR, it is observed that this judgment has not considered various judgments decided on the revenue neutrality of the Hon'ble Supreme Court in the case of Textile Corpn. Marathwada Ltd. (supra) and Coca Cola - 2007 (213) ELT 490 (SC). Therefore, in the light of these judgments, the Hon'ble Supreme Court judgment in the case of Star Inds. is respectfully distinguished. 7. In view of the above judgments and also other judgments relied upon by the counsel the issue of revenue neutrality is settled, according to which if it is established that the duty payable/paid is available as cenvat credit to the recipient which is appellants own sister concern who is discharging duty fro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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