TMI Blog2013 (8) TMI 682X X X X Extracts X X X X X X X X Extracts X X X X ..... lk cement received from the appellant; as NCMU unit is doing so, after availing CENVAT Credit as such Bulk cement, as NCMU unit is not situated in the Bhavnagar Commissionerate. Period of Limitation - Whether the Show Cause Notice which invoked the extended period of limitation was applicable for period beyond one year or not - Held that:- The assesses had every reason to believe that the board’s circular would be applicable to them and hence sought to value of the goods based upon the cost of production and as per provisions of Rule 8 of Central Excise Valuation Rules - the demand of duty prior to the period of one year from the date of issuance of Show Cause Notice dt. 09.11.2009 was hit by limitation and that portion of demand was liable to be set aside. - Appeal No.E/626, 1284/2011; E/195/2012 - Final Order Nos. A/10168-10170/2013-WZB/AHD - Dated:- 7-2-2013 - Mr. M.V. Ravindran and Mr. B.S.V. Murthy, JJ. For the Appellant: Shri V. Sridharan, Adv. For the Respondent: Shri K.N. Joshi, A.R. JUDGEMENT Per: M.V. Ravindran: These three appeals are directed against impugned order as indicated below: SNo. Appeal No. Order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner/2011, dt.22.03.2011, confirmed the demand in respect of 4 Show Cause Notices and in respect of others as detailed below along with interest and imposed equivalent amount of penalty. i) Appeal No.E/1284/2011: Show cause notice No.V/15-89/Dem/HQ/2010-11, dt.03.05.2011 Period involved: April 2010 to September 2010. Confirmed vide Order-in-Original No.39/BVR/Commissioner/ 2011, dt.21.09.2011. Differential Duty: Rs.1,29,65,096/-, interest and equivalent amount of penalty. ii) Appeal No.E/195/2012: Show cause notice No.V/15-18/Dem/HQ/2011-12, dt.01.11.2011 Period involved: October 2010 to February 2011. Confirmed vide Order-in-Original No.3/BVR/Commissioner/2012, dt.01.02.2012. Differential Duty: Rs.1,33,67,203/-, interest and equivalent amount of penalty. 5. Ld. Sr. Advocate appearing on behalf of the appellant submits that the impugned order is incorrect in law as well as in facts and is liable to be set aside. He submits that:- (i) The clearances of cement to the appellant to own unit are for the purpose of consumption of cement in manufacture of RMC. It is his submission that the legal position as to rate of duty specified in Sr.No.1(c) of Notifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able in law. It is his submission that the Hon ble Apex Court, in number of judgments, has held that the Departmental officials are bound by CBE C circular and some of the judgments, he relied upon are:- a) CCE Vs Cadbury India Ltd 2006 (200) ELT 353 (SC) b) CCE Vs Jayant Dalal Pvt. Ltd. 1996 (88) ELT 638 (SC) c) Paper Products Ltd Vs CCE 1999 (112) ELT 765 (SC). It is his further submission that the dispute in the present case is regarding applicability of provisions of Rule 8 of Valuation Rules as to whether would apply to the case where part of the manufactured goods are sold to independent buyers and part of which is cleared to assessee s own unit for captive consumption and the basis of the Show Cause Notices which have been confirmed by the impugned order, is contrary to the circular of CBE C and hence not sustainable in law. (iv) It is his submission that the adjudicating authority has relied upon the decision of Hon'ble High Court of Mumbai in the case of Indian Drugs Manufacturers Association 2008 (222) ELT 22 (Bom.) and the decision of the Larger Bench of the Tribunal in the case of Ispat Industries Ltd 2007 (209) ELT 185 (Tri-LB), but the said decisions are sol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ICWAI. (vi) It is also his submission that the confirmation of differential duty in the Show Cause Notice dt.9.11.2009 is without jurisdiction as the appellants have cleared the cement to their Navi Mumbai Cement Unit, Mangalore Cement Unit and Ready Mix Concrete Unit, while the proposal in the Show Cause Notice, the impugned order has confirmed the differential duty on the quantity of cement cleared by NMCU to the appellant s own RMC units either in loose or in packed condition. It is his submission that NMCU receives the duty paid cement from the appellant and take the credit of the duty paid on the entire quantity of cement and subsequently utilizes the said cement into packing them in smaller packs of 50 kgs. It is his submission that this activity is amounting to manufacture in terms of Section 2(f) of Central Excise Act, 1944 and accordingly NMCU is discharging appropriate duty. It is his submission that since NMCU availed CENVAT Credit of the duty paid by the appellant, whether the appellants were using the same for captive consumption or not, is not within the jurisdiction of the current Commissioner, as the cement cleared from NMCU was either in loose form or in packed f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt cleared by NMCU to RMC units as his jurisdiction is only on the appellant, whose factory is situated in Bhavnagar Commissionerate and also an issue of whether the Show Cause Notice dt.09.11.2009 which invoked the extended period of limitation is applicable for period beyond one year or not. 10. On perusal of the records, we find that there is no dispute as to the fact that the appellant had cleared the bulk cement to their units by discharging duty liability based upon the value worked out by them as per Rule 8 of Central Excise Valuation Rules, 2000 as they were under the impression that the clearances made to their units will fall under the category of Rule 8 of Valuation Rules, 2000. We find that there is no dispute that the appellant is clearing the very same product i.e. bulk cement to independent buyers at rate which is considered as a transaction value. An identical question was raised before Larger Bench in the case of Ispat Industries Ltd (supra). On perusal of the said judgment, we find that in that case, it was also undisputed that the assessees therein were transferring part of its production (20%) of HR coils to its unit at Taloja, Kamothi and Kamleshwar and the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... behalf of the assessee/appellant, i.e. the Dolvi Unit. We agree with the assessee s contention that the expression assessee, wherever it appears in the Central Excise Rules, applies to a particular factory, which is why different units belonging to one company are separately registered and separately assessed to duty. Since the assessee in the present case is the Dolvi plant and it is not the revenue s case that the other three units of the company to whom HR coils were transferred were undertaking further manufacturing operations on behalf of the Dolvi Unit, the provisions of Rule 8 will not apply. We, therefore, hold that Rule 8 is inapplicable in the instant case. 6. We also note that in the present case the application of Rule 4 is being disputed by the Revenue not on the ground that the said rule is inapplicable to the present case but on the ground that a more specific provision in Rule 8 is available to enable determination of the assessable value. As discussed above, the provisions of Rule 8, in our view, are not applicable to the present case and therefore the value determined by the assessee under Rule 4 deserves acceptance. 7. We also agree with the submission of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction is cleared to independent buyers; (b) the provisions of Rule 4 are in any case to be preferred over the provisions of Rule 8 not only for the reason that they occur first in the sequential order of the Valuation Rules but also for the reason that in a case where both the rules are applicable, the application of Rule 4 will lead to a determination of a value which will be more consistent and in accordance with the parent statutory provisions of Section 4 of the Central Excise Act, 1944. 11. It can be seen from the above reproduced portion of the judgment, that Larger Bench has specifically come to the conclusion that provisions of Rule 8 of Valuation Rules will not apply in a case where some part of the production is cleared to independent buyers. As is already recorded by us, in this case before us, there is a sale of bulk cement to independent buyers at a value which is higher than the value arrived at by the appellant for discharge of duty liability of the cement cleared by them to their own units. On merit, we find that the judgment of the Larger Bench will apply and the value adopted by the appellant for the clearances to independent buyers should be considered for a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it situated within Bhavnagar Commissionerate. To our mind, these findings are very sketchy. Suffice it to say that this proposition of the appellant seems to have force, since there are no findings, we direct the adjudicating authority to re-quantify the demand after considering the calculations of clearances made from NCMU unit of appellant. That is to say, we hold against the appellant on merits i.e. the valuation of Bulk cement needs to be valued on the basis of sale value to independent buyers, but differential duty cannot include the clearances effected by NCMU unit of the appellant, after repacking or sale as such of Bulk cement received from the appellant; as NCMU unit is doing so, after availing CENVAT Credit as such Bulk cement, as NCMU unit is not situated in the Bhavnagar Commissionerate. To that extent, impugned orders are set aside and matters remanded for re-quantification/recalculation of differential duty. 14. Since there is a need to do re-calculation/re-quantification of differential duty, we hold that the penalties proposed to be imposed on the appellant under the provisions of Rule 25 of Central Excise Rules, 2002 also needs to be reconsidered. For this limite ..... X X X X Extracts X X X X X X X X Extracts X X X X
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