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2023 (11) TMI 963 - AT - Central ExciseValuation of goods - captive consumption - determination of transfer price, which is much lower than value that should have been determined as per Rule 8 & 9 of Central Excise (Determination of Price of Excisable Goods) Valuation Rules, 2000 and CAS-4 - Extended period of limitation as per proviso to Section 11A(1) of the Central Excise Act - demand on duty imposing equivalent penalty - HELD THAT:- Appellant have already paid an amount of Rs.85,25,918/- towards central excise duty and Rs.37,843/- towards education cess. From this chart it is quite evident that appellant has admitted and paid the entire differential duty liability for the year 2003-04 and 2005-06. There is a short payment only in the year 2004-05. It is also noted that the appellant sister concern was taking the CENVAT Credit of the differential duty paid by them on the basis of the supplementary invoice. Computation of period of limitation - HELD THAT:- As per the procedure followed by the appellant they were paying the differential duty on the basis of the Cost Accountant Certificate issued on the basis of finalized/ audited financial/ cost records, the relevant date for computation of period of limitation under section 11A of the Central excise Act, 1944 should be as per clause (iv) of Explanation 1 (b) of the said section which reads “in case where duty of excise is provisionally assessed under this Act or the rules made thereunder, the date of adjustment of duty after the final assessment thereof.” Accordingly the show cause notice has to be treated as one being issued within the normal period of limitation for making the demand. Levy of penalty - HELD THAT:- It is observed that the appellant was following the procedure as laid down by making the payment of duty on the basis of the cost of production determined on the basis of the finalized accounting records of the previous year and subsequently paying the differential duty on the basis Cost Accountant certificate issued on the basis of the finalized accounting records of current year. When this is prescribed and also is an accepted procedure for payment of duty on the goods consumed captively, there are no merits in the findings recorded by the Commissioner for imposing penalty under Section 11AC read with Rule 25. The penalties under section 11AC of the Central Excise Act, 1944 read with Rule 25 of the Central Excise Rules, 2002 set aside Appropriation of duty paid Rs 56,55,637/- + Rs 72,186/- by the Appellant for the period 2003-04, 2005-06 respectively, towards the demand made in the show cause notice and confirmed by the impugned order - demand of differential duty for the year 2004-05 is modified to Rs 66,13,705/- (Rs 65,48,222/- (C Ex Duty) + Rs 65,482/- (Edu Cess). Amount of Rs 27,98,055/- paid by the appellant for this period is appropriate against this amount upheld - differential duty for the year 2004-05 to the extent of this amount not paid by the Appellant is upheld - demand for interest under Section 11AB is upheld. Appeal allowed in part.
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