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2015 (5) TMI 24 - CESTAT AHMEDABAD

2015 (5) TMI 24 - CESTAT AHMEDABAD - 2015 (328) E.L.T. 390 (Tri. - Ahmd.) - Duty under Compounded Levy Scheme - Notification No. 16/2001-CE (NT) dated 30.4.2001 - demands of differential duty - Whether the original value of investment in plant and machinery of the appellant is above ₹ 3 Crore or not for being eligible to voluntary Compounded Levy Scheme under the provisions of Rule 96ZNA to 96ZND (Section ExA) of the Central Excise Rules, 1944 - Held that:- It is revealed from the records .....

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chnically qualified to tender opinion in relation to the technical standards prescribed under the provisions of Food Adulteration Act and Rules thereunder has tendered his opinion it would not be open to any one to take a contrary stand, unless and until such technical opinion is displaced by specific and cogent evidence in the form of another technical opinion. Merely by approaching the matter by stating that the goods could be converted into palm oil of edible grade by carrying out certain pro .....

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r Accounting Standards-10. The adjudicating authority was not right in deciding the original valuation of plant and machinery himself, in the absence of any contrary expert opinion. - Decided in favour of assessee. - Appeal No. E/491/2010, E/398-399/2012 - Order No. A/10400-10402/2015 - Dated:- 27-4-2015 - Mr. P.K. Das, Hon'ble Member (Judicial) And Mr. H. K. Thakur, Hon'ble Member (Technical),JJ. For the Appellant : Shri P.M. Dave, Advocate For the Respondent : Shri K. Sivakumar, Author .....

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st the subsequent orders passed by the Adjudicating authority with respect to demands of differential duty arisen as a result of OIO No. 20/Commr/96 ZNA/01 dated 25.10.2001. 2. Shri P.M. Dave, (Advocate) appearing on behalf of the appellant during the hearing and through written submissions argued that after receipt of OIO dated 25.10.2001 appellant went to the Gujarat High Court through a writ petition and Hon'ble Gujarat High Court vide order dated 25.2.2012 in SCA No. 10588 of 2001 with S .....

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e Supreme Court respectively. 2.1 Shri P.M. Dave, (Advocate) argued that appellant filed an application under Chapter E-xA [Rule ZNA to 96ZND] of the Central Excise Rules, 1944 introduced under Notification No. 16/2001-CE (NT) dated 30.4.2001. That the required declaration under Rule 96ZNB regarding original value of the investments made in the plant and machinery installed in the factory, in prescribed format was made duly certified by a Chartered Accountant. That the said declaration was filed .....

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artered Accountants of India. Learned Advocate made the bench go through the certificates issued by the Chartered Accountant which were also produced before the adjudicating authority. 2.2 Learned Advocate further argued that as per the legal requirement under Rule 96 ZNB(1) of the Central Excise Rules, 1944, appellant was required to declare the original value of investments in the prescribed format duly certified by a Chartered Accountant or Cost Accountant. That as per the prescribed conditio .....

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& Chemicals Limited vs. CCE, Vadodara [2014 (309) ELT 94 (Tri. Ahmd.)] (v) Eastern Shipping Agency vs. CST, Ahmd. [2013 (32) STR 630 (Tri. Ahmd.) (vi) Swadesh Khadi Gramudyog Seva Sangh vs. CCE, Ahmd. [2009 (245) ELT 323 (Tri. Ahmd.)] (vii) Abraham J. Tharakan vs. CCE, Cochin [2007 (210) ELT 112 (Tri. Bang.)] 2.3 With respect to Appeal Nos. E/398 & 399/2012, it was also argued by the learned Advocate that if on merits their case is not accepted then they will be eligible to the credit o .....

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a Cost Accountant under Section 14A of the Central Excise Act for disputing the certification made by the assessee s Chartered Accountant; the Cost Accountant so appointed by the Commissioner visited the factory of the assessee and then submitted a report about value of investment in plant and machinery linking his physical verification with the figures in the assessee s balance-sheet; and the Cost Accountant so appointed by the Commissioner was also allowed to be cross examined in adjudicating .....

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y this Hon ble Tribunal in the case of Dayang Tea Estate (supra), the opinion and knowledge of the Adjudicator cannot be the final words and to be applied in the face of an expert opinion. The order of the Commissioner which is in the nature of a certification of value of investment in plant and machinery installed in the appellant s factory is without jurisdiction because the Commissioner had no authority in law to undertake such exercise himself, and therefore the order passed him is void. 3. .....

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re retrospective in nature and the Original Value of plant and machinery was required to be done as per Accounting Standard issued by the Institute of Chartered Accountants of India. (iii) That adjudicating authority got the original value of plant and machinery verified from the jurisdictional Deputy Commissioner based on the balance sheets of the appellant. (iv) Learned AR relied upon the Rajasthan High Court s judgment in the case of Sulzer Processors Pvt. Limited vs. CCE-II [2010 (254) ELT 5 .....

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olved in these appeals is whether the original value of investment in plant and machinery of the appellant is above ₹ 3 Crore or not for being eligible to voluntary Compounded Levy Scheme under the provisions of Rule 96ZNA to 96ZND (Section ExA) of the Central Excise Rules, 1944. As per the provisions contained in Rule 96 ZNB(1) of Central Excise Rules, 1944, reproduced below, if this value is less than ₹ 3 Crore then appellant is entitled to avail Compounded Levy Scheme for the text .....

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e first time in a new factory coming into existence after the 1st day of May, 2001, shall not exceed three crore rupees, irrespective of whether such plant and machinery is in use or not, or is in working condition or not, and the independent textile processor shall declare the original value of investment in such plant and machinery installed in his factory, on the dates mentioned above, in the prescribed format duly certified by a Chartered Accountant or cost Accountant. The Commissioner of Ce .....

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application made by an independent textile processor, on or before the 20th May, 2001, to the Commissioner of Central Excise under sub-Rule (2) of Rule 96ZNA for availing the special provisions contained in Section E-XA of the Central Excise Rules, 1944, for the period on and from 1st May, 2001 to 31st March, 2002, shall be deemed to be an application made under sub-paragraph (1). If such application had been granted by the Commissioner of Central Excise on a date prior to 1st day of July, 2001, .....

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d that the original value of the investment in the plant and machinery installed in the factory of the independent textile processor , shall be the original value as determined in accordance with the Accounting Standards issued by the Institute of Chartered Accountants of India of Accounting for Fixed Assets. 5. The above amendments carried out have been interpreted by Hon'ble High Court of Rajasthan in the case of Sulzer Processors Pvt. Limited vs. CCE-II (supra), relied upon by the learned .....

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t it is that thereby only an explanation has been added so as to remove the doubts regarding method of assessment of value of investment in plant and machinery. Such an amendment, essentially being clarificatory in nature, cannot be considered taking away any of the vested rights of the appellant. It being a matter of exemption, if anything in the original Exemption Notification called for clarification or explanation, the exercise in that direction was unexceptionable. By the said Notification .....

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tment has changed the system of valuation after some rights have crystallized in the appellant under Notification No. 32/2001. When one of the pre-condition had been with reference to the extent of value of investment in the plant and machinery, a reasonable explanation for the method of working out such valuation cannot be said to be beyond the terms of the original Notification itself. By way of such an explanation only the doubts, if any, in the original Notification were quelled and removed. .....

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rom the records that the appellant filed application in proper form ASP-I duly certified by the Chartered Accountant as required under Rule 96ZNB (I) of the erstwhile Rule 1944. By a letter dated 02.7.2001, the appellant was asked as to why their application under Rule 96ZNA should not be rejected as the Deputy Commissioner of Central Excise verified and reported on the basis of Balance Sheet the original value of plant and machinery was more than three crores. The appellant submitted reply to t .....

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01.5.2001 is amounting to ₹ 2,77,80,069/- and ₹ 2,84,30,693/-, respectively. 8. The adjudicating authority, on the basis of verification report of the Deputy Commissioner, on his own, estimated the original value of plant and machinery as more than Rs. three crores. The findings of Adjudicating authority is as under:- This leaves me with no alternative but to estimate the original value on my own. This machinery have to be presumed to have been purchased in the year 1990 when the un .....

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of the Central Excise Rules, 1944, which was duly certified by the Chartered Accountant. After the issue of Notification 32/2001-CE and 41/2001-CE, appellant gave a certificate dated 20.9.2001 in continuation of earlier certification from the same Chartered Accountant that valuation of the fixed assets was done as per Accounting Standard 10 (AS-10). It is observed from the provisions of Rule 96ZNB (1) of Central Excise Rules, 1944 that there is no mention of valuation to be done by Accounting St .....

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ating authority was not satisfied by the certificates given by the Chartered Accountant, then he could have asked the appellant to furnish such a certification as prescribed from another Chartered Accountant but can not himself decide the valuation of plant and machinery on the basis of presumptions, when statute demands such a certification to be done by a Chartered / Cost Accountant. Alternatively he could have also got the cost auditing done from an appropriate authority, where appellant coul .....

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ng the course of discussion referred? to the provisions of Prevention of Food Adulteration Act, 1954 as well as Rules thereunder with special reference to Sec. 6 of the said Act and Rule 5 which defines standards of quality on various articles as specified in Appendix B to the Rules. Our attention was invited to various standards set out in Appendix B to urge that only slight difference was there between the different kinds of oils for the purpose of ascertaining whether oil was of edible grade .....

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Customs House, Kandla, who has opined that the same does not conform specification for crude palm oil (edible grade) as per IS-8323-E-1977. It appears that the said sample was also forwarded through the Referal Hospital and Community Health Centre, Mundra-Kutch, to the Public Analyst, Food and Drug Laboratory, Vadodara for opinion. He has opined to the effect that the sample conforms to the standards and provisions laid down under the Prevention of Food Adulteration Rules, 1955, for palm oil an .....

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