GST Helpdesk   Subscription   Demo   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (5) TMI 374 - CESTAT MUMBAI

2015 (5) TMI 374 - CESTAT MUMBAI - TMI - Valuation - inclusion of value of goods supplied free of cost - Demand of differential duty - Suppression of value of goods - Imposition of interest and penalty - Held that:- If certain items supplied by the buyers free of cost to the manufacturer the value consideration of the said items in the form of amortization cost must be added in the assessable value for the reason that the sale value in such case cannot be considered as sole consideration. Theref .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e goods and not added 10% notional profit in the assessable value while clearing the goods to their sister concern. - differential duty demand on both the counts are correct and legal and the same does not require any interference.

Appellant have not added amortization cost in respect of goods supplied to other than related person and also not correctly valued in respect of goods supplied to their sister concern. The fact of incorrect valuation and consequent short payment of duty was .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e that merely because recipient of the goods are entitled for the Cenvat Credit, it is a case of revenue neutrality. The availment of Cenvat Credit is subsequent act and that cannot be basis for payment of duty in the clearance of the goods from the manufacturer factory. - . Commissioner has correctly imposed the penalty under Section 11AC and interest under Section 11AB which does not require any interference - Decided against assessee. - Appeal No. E/764, 765/12-MUM - Dated:- 23-4-2015 - P K J .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e Thousand Eight Hundred and Nine only) as proposed in the Show Cause Notice No. DGCEI/MZU/I&IS'B'/12(4)65/2009 dated 06.05.2011, in terms of Section 11A(2) of the Central Excise Act, 1944 from ASAL Chakan (Reference to para 12(a) of Show Cause Notice). (ii) I appropriate the amount of ₹ 49,61,809/- already paid by ASAL Chakan, during investigation against the demand determined and confirmed in (i) above (Reference to para 12(a) of Show Cause Notice). (iii) I order recovery of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y Nine Thousand One Hundred and Twenty Four Only) as proposed in the Show Cause Notice No. DGCEI/MZU/I&IS'B'/12(4)65/2009 dated 06.05.2011. in terms of Section 11A(2) of the Central Excise Act, 1944 from ASAL Chakan (Reference to para 12(c) of Show Cause Notice). (vi) I appropriate the amount of ₹ 1,27,53,276/- paid by ASAL Chakan during investigation towards confirmed demand determined in (v) above (Reference to para 12(c) of Show Cause Notice) and the outstanding duty amounti .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Sixty One Thousand Eight Hundred and Nine only) and ₹ 2,02,99,124/- (Rupees Two Crores Two Lakhs Ninety Nine Thousand One Hundred and Twenty Four Only) under Section 11AC of Central Excise Act, 1944 read with Rule 25 of the Central Excise Rules, 2002 on ASAL Chakan (Reference to para 12(e) of Show Cause Notice). (x) It is however ordered that if the duty and interest is paid within 30 days from the date of receipt of this order, the assessee is liable to pay only 25% of duty as penalty su .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

(a) of Show Cause Notice). (xii) I appropriate the amount of ₹ 37,79,725/- (Rupees Thirty Seven Lakhs Seventy Nine Thousand Seven Hundred and Twenty Five only) already paid by ASAL Bhosari, during investigation towards the interest liability determined and confirmed at (xi) above (Reference to para 13(a) of Show Cause Notice). (xiii) I order recovery of interest at appropriate rates in terms of Section 11AB of Central Excise Act, 1944 from ASAL Bhosari (Reference to para 13(b) of Show Caus .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t, 1944 from ASAL Bhosari (Reference to para 13(c) of Show Cause Notice). (xvi) I appropriate the amount of ₹ 3,389/- paid by ASAL Bhosari, during investigation towards confirmed demand in (xv) above (Reference to para 13(c) of Show Cause Notice) and the outstanding duty amounting to ₹ 501/- should be paid forthwith. (xvii) I order recovery of interest at appropriate rates in terms of Section 11AB of Central Excise Act, 1944 from ASAL Bhosari (Reference to para 13(d) of Show Cause No .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he Central Excise Act, 2002 on ASAL Bhosari (Reference to para 13(e) of Show Cause Notice). (xx) It is however ordered that if the duty and interest is paid within 30 days from the date of receipt of this order, the assessee is liable to pay only 25% of duty as penalty subject to the condition that the reduced penalty is applicable if the same is paid within 30 days from the date of receipt of this order. The fact of the case is that M/s. Automotive Stampings and Assemblies Ltd having units at C .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Valuation (Determination of Price of Excisable Goods) Rules, (CEVR) 2000. (2) They are not adding 10% to the cost of production as required under Rule 8of CEVR, 2000 while clearing the goods to their sister concern. After investigation carried out, a show cause notice No. DGCEI/MZU/I&IS'B'/12(4)65/2009 dated 06.05.2011 was issued to the appellant Chakan and Bhosari Units, wherein it was proposed to demand Central Excise duty amounting to ₹ 49,61,809/-, ₹ 2,02,99,124/-, &# .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e of goods manufactured and cleared by the manufacturing units of appellant as per the Rule, 6 of CEVR, 2000. (c) Non addition of 10% to the cost of production while clearing the goods to sister units as required to be included under Rule 8 of CEVR, 2000. While in the adjudication Ld. Commissioner confirmed the demand of duty, penalties and interest as detailed in Para 1 above. Aggrieved by the impugned order the appellant are before us. 2. Shri. Gajendra Jain, Ld. Counsel for the appellant subm .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s etc. He submits that this is not the case of clandestine removal of the goods. There is a case where interpretation of valuation provisions are involved. Short payment of duty is not an account of any malafide intention to evade excise duty. It is only due to the interpretation that what value should be adopted for discharging excise duty in respect of clearances made to their sister concern as well as to other concern. He submits that in all the clearances proper duty paying invoices were iss .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

have been paid at the time of clearances the same would have been availed as Cenvat Credit by the respective consignees and as a result payment of duty made by the consignee on their final product from PLA would have stood reduced to the extent of quantum of the present demand. Therefore there is no loss to the Revenue and in this case there is neutrality of Revenue. He placed reliance on following judgments: (a) Jay Yuhshin Ltd. Vs. Commissioner of Central Excise, New Delhi [2000 (119) E.L.T. 7 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e intention cannot be attributed to the assessee and accordingly no penalty and interest is imposable. 3. On the other hand, Shri. V.K. Agarwal, Ld. Addl. Commissioner (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He further submits that it is admitted position that appellant was legally bound to pay excise duty on the elements which was not added in the assessable value at the time of clearance of the goods, this itself shows that they have knowingly u .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

that issue involved is of interpretation of law. Moreover, the appellant do not contest the duty demand as the same is not under dispute. This undisputed position clearly established malafide intention of the appellant. He further submits that in the show cause notice and in the impugned order proviso to Section 11A was invoked and duty was confirmed for the extended period also. Therefore the ingredients such as suppression of facts, misdeclaration of value etc. very much exist in the present c .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e there is clear suppression of facts regarding non inclusion of amortization cost in terms of Rule 6 and incorrect valuation under Rule 8 of Central Excise Valuation Rules, 2000. Therefore this case does not fall under the category of Revenue Neutrality. He prayed that impugned order is proper and legal and same be upheld and appeal of the appellant may be dismissed. 4. We have carefully considered the submissions made by both the sides and perused the records. 5. As regard confirmation of duty .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

upplied free of cost by the customer, the amortized cost must be included in terms of Rule 6 of Central Excise Valuation Rules, 2000, which is reproduced below: RULE 6. Where the excisable goods are sold in the circumstances specified in clause (a) of sub-section (1) of section 4 of the Act except the circumstance where the price is not the sole consideration for sale, the value of such goods shall be deemed to he the aggregate of such transaction value and the amount of money value of any addit .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ount of money value of additional consideration flowing directly or indirectly from the buyer to the assessee in relation to sale of the goods being valued and aggregated accordingly, namely:- (i) value of materials, components, parts and similar items relatable to such goods; (ii) value of tools, dies, moulds, drawings, blue prints, technical maps and charts and similar items used in the production of such goods; (iii) value of material consumed, including packaging materials, in the production .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ion of the price of the goods by way of charging a lesser price from or by offering a special discount to the buyer who has made the advance deposit. Illustration 1.- X, an assessee, sells his goods to Y against full advance payment at ₹ 100 per piece. However, X also sells such goods to Z without any advance payment at the same price of ₹ 100 per piece. No notional interest on the advance received by X is includible in the transaction value. Illustration 2.- A, an assessee, manufact .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

certain items supplied by the buyers free of cost to the manufacturer the value consideration of the said items in the form of amortization cost must be added in the assessable value for the reason that the sale value in such case cannot be considered as sole consideration. Therefore, we are of the view on this count that amortization cost is legally includible in the assessable value. As regard the goods supplied by the appellant to their sister concern, it is undisputed that valuation of such .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

arrived at by following the provision of Rule 8, of Valuation Rules, 2000. In view of above position we are of the considered view that differential duty demand on both the counts are correct and legal and the same does not require any interference. Now we are taking up the issued of imposition of interest and penalty. From the fact of the case it is admitted that appellant have not added amortization cost in respect of goods supplied to other than related person and also not correctly valued i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the reason that in each and every case the buyer is entitled for the Cenvat Credit and if this is so then every manufacture/supplier will be free to either pay or not to pay excise duty. No statute permit that if the buyer is entitled for Cenvat Credit then the supplier can avoid to pay excise duty. It is straight law, irrespective of any other factors as and when a manufactured goods is cleared from the factory of the manufacturer he is bound to pay the correct duty leviable thereon, there is .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version