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2016 (9) TMI 1175 - AT - Central ExciseValuation - captive consumption - Frequency or periodicity of costing in terms of CAS-4 - whether the CAS 4 based costing of Iron Ore Concentrate is to be done on an annual basis or for a lesser durations of 2/4/5 months, as and when the raw material costs varied - no sale of iron ore concentrate by the appellant - clearance to sister unit for further use is subjected to excise duty and valuation for such duty has to be worked out in terms of Rule 8 of Valuation Rules, 2000 - appellants followed different value during the same financial year based on revision of costing within the year more than once. Held that:- it is an admitted fact that the appellants themselves did not follow costing to arrive at deemed transaction value for each clearance. They have considered a period of many months and worked out the costing, in terms of CAS-4 for that period and paid duty. Thereafter, they revised said costing when there are changes in raw material cost. That being the case, we find that the reliance placed by the appellant on the principle that time of removal is relevant and, hence, annual costing is not tenable, is unsustainable. The fact remains that while the duty liability has to be discharged at the time of removal of excisable goods in a situation where there is no sale transaction and known value, the deemed transaction value has to be constructed based on costing method which necessarily will involve an averaging of cost for a period, considering all the parameters. It is neither the case of the appellant nor there is such an approved standard for arriving at cost of excisable goods for each individual clearance. When at the time of each clearance of excisable goods for captive consumption the exact transaction value could not be arrived at the relevant time the duty has to be paid on a provisional basis and upon arriving at the costing applying CAS-4 and the assessable value in terms of Rule 8 of Valuation Rules final determination of duty liability has to be made. In the present case, admittedly no provisional assessment was resorted to by the appellant. Hence, the determination of actual cost much later on the clearance resulted in certain adjustments and payments by the appellant. Para 8 of guidelines issued by the Institute of Cost & Works Accountants of India on CAS-4 deals with periodicity of CAS-4 Certificates. On perusal of the guidelines by the ICAI, we find while arriving at costing based on CAS-4 the correct method will be to determine the same based on actual audited data as per the account year of the company. To that extend we find the CAS-4 cost price arrived at on annual basis by the Revenue is correct procedure. Quantification of differential duty - duty paid in excess in certain months has been availed as credit by sister unit - time barred - Held that:- even though there is no provisional assessment in the present case, the duty determination on the inter-unit transfer is made on annual costing. As such when the Department arrived at cost on annual average basis the duty liability, excess or shortage has also to be determined on such basis. It is not tenable while for arriving at per unit duty liability the whole year data is considered for costing, for total duty liability only months when short payment was noticed were considered. In other words when CAS-4 based annual costing formed basis for arriving transaction value, the overall duty liability/short payment should be arrived at after considering duty already paid during that year on such goods. We find the reasoning given by the Original Authority against adjustment of already paid duty as untenable. Section 11B has no application in such situation, when the appellants duty liability is determined on annual CAS-4, the duty already paid during said period has to be adjusted. The question of unjust enrichment has no relevance here. There is no refund considered here. The point that the duty paid in excess in certain months has been availed as credit by sister unit hence, cannot be adjusted towards short payment also not tenable. The demand arose based on annual costing. Such cost price in terms of Rule 8 will apply to all clearances made during the relevant year. Admittedly, duty already discharged has to considered for arriving at overall short payment. Selectively applying the said cost price only for months when the clearances were below such cost price is not legally sustainable. It is found that the Original Authority has not fully examined the issue of time bar raised by the appellant. Intimations of price revision followed by CAS-4 Certificates have been given to the Department. Monthly statutory returns with duty payment details have been filed. The existence of more than one cost certificates during different months in one financial year is apparently in the knowledge of the Department. Hence, the question of time bar requires closer scrutiny. Since we intend to remand the case to the Original Authority on the quantification of duty demand, this aspect also has to considered by the Original Authority for a clear finding. - Appeal partly allowed by way of remand
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