No appeal would lie before the Hon’ble Supreme Court on factual findings of the Tribunal

[Bimal jain]

Dear Professional Colleague,

No appeal would lie before the Hon’ble Supreme Court on factual findings of the Tribunal

We are sharing with you an important judgment of Hon’ble Supreme Court, in the case of Commissioner of Central Excise Vs. Koya and Company Construction (Pvt.) Ltd. [2015 (1) TMI 464 - SUPREME COURT OF INDIA] on following issue:

Issue:

Whether an appeal can be lay before the Hon’ble Supreme Court on factual findings of the Tribunal?

Facts and background:

Koya and Company Construction Pvt. Ltd. (“the Assessee”) was engaged in the manufacture and selling of PSC pipes. The Assessee cleared the PSC pipes on payment of Excise duty to KCCL, an interconnected undertaking. The duty liability was calculated on Transaction Value in respect of clearance made to an interconnected undertaking.

The Department argued that since there was 'mutuality of interest' as the Assessee had received interest-free advance of ₹ 7.2 crores from his inter connected undertaking, therefore the Assessable Value was to be determined as per Rule 9 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules 2000 (“the Valuation Rules”)

The Assessee filed an appeal before the Hon’ble Tribunal arguing that:

• Interest-free advance was a commercial transaction, which was reduced from ₹ 7.2 crores on March 31, 2003 to ₹ 24 lakhs on March 31, 2004; and
• Since, the Assessee and his inter connect undertaking were not under

Holding and Subsidiary relationship, Rule 10 of the Valuation Rules was also inapplicable

Accordingly, the Hon’ble Tribunal held that:

• The advance had been decreased on account of supply of goods by the Assessee to buyer; therefore, it was a commercial transaction and there was no 'mutuality of interest';
• In absence of relationship as defined under Sections 4(3)(b)(ii)/(iii)/(iv) of the Central Excise Act, 1944, Rule 9 of the Valuation Rules or proviso thereto was not applicable;
• Rule 10(b) of the Valuation Rules would not be applicable because there is no Holding - Subsidiary relationship between the Assessee and his buyer of the goods.
• Accordingly, Assessable Value would be determined as per Rule 11 of the Valuation Rules i.e. best judgment and value will be determined just like captive consumption under Rule 8 of the Valuation Rules.

Held:

Being aggrieved, the Department filed an appeal before the Hon’ble Apex Court.

The Hon’ble Apex Court after observing that the Tribunal had passed the order on the basis of facts and circumstance of the case held that since the Tribunal is the final fact finding authority, no appeal would lie before the Supreme Court on such factual findings.

Hope the information will assist you in your Professional endeavors. In case of any query/ information, please do not hesitate to write back to us.

Thanks and Best Regards,

Bimal Jain

FCA, FCS, LLB, B.Com (Hons)

Delhi:

Flat No. 34B, Ground Floor, Pocket - 1,

Mayur Vihar, Phase - I,

Delhi – 110091, India

Desktel: +91-11-22757595/ 42427056

Mobile: +91 9810604563

Chandigarh:

H.No. 908, Sector 12-A,

Panchkula, Haryana – 134115

Kolkata:

Ist Floor, 10 R G Kar Road

Shyambazar, Kolkata – 700 004

Email: [email protected]

Web: www.a2ztaxcorp.com

Disclaimer: The contents of this document are solely for informational purpose. It does not constitute professional advice or recommendation of firm. Neither the authors nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this document nor for any actions taken in reliance thereon.

Readers are advised to consult the professional for understanding applicability of this newsletter in the respective scenarios. While due care has been taken in preparing this document, the existence of mistakes and omissions herein is not ruled out. No part of this document should be distributed or copied (except for personal, non-commercial use) without our written permission.