2024 (9) TMI 1355 - AT - Central Excise

Valuation of the goods cleared by the appellant under section 4 of the Act read with Central Excise Valuation (Determination of Price of Excisable Goods) Rules 2000 - follow up demand for an earlier order passed for the period October 2010 to July 2015 - Extended period of limitation - HELD THAT - This bench had by final order No. 51135 of 2022 dated 02.12.2022 2022 (12) TMI 450 - CESTAT NEW DELHI held that Evidence in the case is insufficient to hold that the appellant and its buyers Vandana and Shivali are interconnected undertakings and there is no allegation or evidence that they are related in any other manner. Even if they are inter-connected undertakings but are not related in any other manner valuation has to be done as per Valuation Rule 10(b) as if they are not related persons and the demand would not sustain. - This order was passed setting side the order-in-appeal dated 15.02.2018 passed by the Commissioner (Appeals) for the relevant period. In the present appeal the Assistant Commissioner and the Commissioner (Appeals) followed the previous order of the Commissioner (Appeals) dated 15.02.2018. Since the order dated 15.02.2018 is set aside this appeal also needs to be allowed and the demand needs to be set aside. The impugned order is set aside - appeal allowed.

Summary

Issues: Valuation of goods under Central Excise Act, 1944 read with Valuation Rules; Application of extended period of limitation under Section 11A; Interpretation of Valuation Rules; Finality of Tribunal's order.

The judgment by the Appellate Tribunal CESTAT New Delhi pertains to an appeal challenging the order-in-appeal confirming a demand and penalty imposed under the Central Excise Act, 1944. The primary issue involved is the valuation of goods cleared by the appellant under Section 4 of the Act read with the Central Excise Valuation Rules for the period August 2015 to August 2016, following a previous demand for the period October 2010 to July 2015. The Tribunal referenced a previous order regarding the interpretation of Section 11A, emphasizing that demands for periods prior to September 2014 are time-barred unless duty escapes assessment within the normal limitation period. The Tribunal highlighted that officers must scrutinize returns to check for correct duty payment and that the failure to do so cannot justify invoking the extended period of limitation. The judgment also addressed the necessity for officers to call for information if needed for valuation scrutiny, emphasizing that the appellant cannot be faulted for not disclosing information not required in the ER-1 return.

Furthermore, the Tribunal noted that the demand was confirmed based on Valuation Rules not invoked in the show cause notice, and the amended Valuation Rules post-2013 were not applied. The Tribunal found insufficient evidence to establish the appellant and its buyers as interconnected undertakings, stressing that valuation must be done as if they are not related persons unless proven otherwise. The Tribunal set aside the order-in-appeal for the relevant period, following its previous decision, and allowed the present appeal, setting aside the demand. The Tribunal highlighted that the Supreme Court had limited its notice to specific observations in the Tribunal's order, indicating finality on the merits of the case. Consequently, the Tribunal allowed the appeal and set aside the impugned order, providing consequential relief to the appellant, with the order pronounced in open court on 24/09/2024.