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2015 (5) TMI 1024 - CESTAT MUMBAI

2015 (5) TMI 1024 - CESTAT MUMBAI - 2015 (328) E.L.T. 146 (Tri. - Mumbai) - Includibility of value of flaps in the assessable value of tyres and tubes - Demand already paid by the appellant but same was not paid under protest - whether value of flaps is not includible in the assessable value of tyres and tubes - Held that:- Once the demand is set aside for any reason, amount already paid cannot be held as validly paid and cannot be justified on merit. We are of the view that the findings of the .....

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sh Nair, Member (J) Shri Prashant Paranjape, Advocate, for the Appellant. Shri V.K. Shastri, Assistant Commissioner (AR), for the Respondent. ORDER [Order per : Ramesh Nair, Member (J)]. - The appeal is directed against Order-in-Appeal No. BPS/(408) 181A/13470/2004, dated 16-12-2004 passed by the Commissioner of Central Excise & Customs (Appeals), Aurangabad, wherein ld. Commissioner confirmed demand of ₹ 4,04,487/- however set aside the demand of ₹ 1,04,507/- and appeal filed by .....

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of discharging excise duty. The appellant is taking permission under Rule 51A of erstwhile Central Excise Rules, 1944 from time to time, however one permission letter bearing F. No. V CH 40 (10) 72/TB/92/Pt-1, dated 17-8-1999 contains condition No. (10) i.e. value of flaps should be included in the assessable value of tyres and tubes at the time of clearance. The appellant without taking note of such condition kept on clearing the tyres and tubes without including the value of flaps, therefore i .....

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3 was issued proposing : (a) Recovery of Central Excise duty amounting ₹ 1,64,508/- under proviso to sub-section (1) of Section 11A of Central Excise Act, 1944. (b) Confirmation of Central Excise duty amounting ₹ 4,04,487/- and appropriation thereof as said amount already paid by the appellant. (c) Imposition of penalty under Section 11AC of Central Excise Act, 1944 read with Rule 173Q of Central Excise Rules, 1944. (d) Charging of interest under Section 11AB of C .....

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angabad. The amount of ₹ 4,04,487/- already paid by the noticee is appropriated against the aforesaid amount of confirm demand. The noticee should pay the remaining amount of ₹ 1,64,508/-. (ii) I impose total penalty of ₹ 5,68,995/- on M/s. Balkrishna Industries Ltd. (Unit: Balkrishna Tyres), B-66, Waluj, Aurangabad under Section 11AC of Central Excise Act, 1944. (iii) I confirm the recovery of interest at applicable rate under Section 11AB of Central Excise Act, 1944 .....

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- was set aside. Aggrieved by the said order the appellant is before us. 2. Shri Prashant Paranjape, ld. Counsel for the appellant submits that as regard issue of inclusion of value of flaps and total duty due thereupon was investigated and consequent to the investigation appellant paid duty of ₹ 4,04,487/- and subsequently show cause notice was issued and the same is culminated in the adjudication order. He submits that appellant has defended the case right from adjudication stage up .....

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ect or otherwise. As regard merit of the case ld. Commissioner (Appeals) categorically held that the value of flaps is not includible in the assessable value of tyres and tubes. It is his submission that once the ld. Commissioner (Appeals) held that value of flaps is not includible in the assessable value of the tyres and tubes, there is no other option except to drop the entire demand on the value of flaps. He submits that present case is against demand proceedings and not case of refund. The r .....

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half of the Revenue reiterates the findings of the impugned order. He further submits that the value of flaps was correctly includible in the assessable value of tyres and tubes. He submits that issue on merit whether the value of flaps should be included or otherwise in the assessable value of tyres and tubes was not challenged by the appellant and duty paid was not under protest therefore the ld. Commissioner (Appeals) has correctly confirmed the demand of ₹ 4,04,487/-. He placed relianc .....

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e assessable value of tyres and tubes cleared by the appellant from his factory. It is observed that the appellant after commencement of the investigation paid duty of ₹ 4,04,487/-. After completion of investigation a show cause notice was issued on the issue of merit wherein it was proposed to confirmed demand of ₹ 4,04,487/- and appropriation thereof as said amount was already paid by the appellant and amount of ₹ 1,64,508/- was also proposed to be demanded which was not paid .....

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test. With this set of facts it is clear that the ld. Commissioner held that the value of flaps is not includible in the assessable value of tyres and tubes. This part of the order was not challenged by the Revenue therefore the same attained finality. Since both the demand i.e. ₹ 4,04,487/- and ₹ 1,64,508/- were covered under show cause notice and the appellant have been challenging these amounts right from the show cause notice stage, payment of ₹ 4,04,487/- shall be deemed t .....

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nder Chapter 40 of the CETA, 1985. They used to bring flaps from outside and dispatched the same along with tyres and tubes for which necessary permissions was granted under Rule 51A of the Central Excise Rules, 1944 by the Commissioner of Central Excise & Customs, Aurangabad. The period involved in the show cause notice is from August, 1999 to 22-2-2001. The details are given as under :- F. No. & date under which permission was granted Validity of the permission Whether permission inclu .....

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hey did not subject them to any manufacturing process. Therefore, the incidence of value of the flaps is not required to be added in the assessable value. To support their say they placed reliance upon the case laws cited in the grounds of appeal and at the time of personal hearing. Therefore, the condition laid down for recovery of duty on the value of the flap is not as per the law. The ratio of the case laws cited by the Appellants is squarely applicable in the instant case. The amount alread .....

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between the department and the Appellants that there can be no wilful suppression or misstatement of facts etc. Therefore, on the limitation also the case does not survive. As the demand of duty itself is not sustainable, the imposition of penalty under Section 11AC read with Rule 173Q and demand of interest under Section 11AB is not sustainable. 7. In view of the above, I am inclined to accept the contentions of the Appellants. I, therefore, set aside the confirmation of demand worth S .....

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f the view that once it is held that value of flaps is not includible in the assessable value of tyres and tubes, the demand of duty on such value of flaps would not sustain irrespective of fact whether such duty was already paid either under protest or otherwise. The entire proposal of demand and confirmation thereof by the adjudicating authority is on the root cause of includibility of value of flaps in the assessable value of tyres and tubes. When the ld. Commissioner (Appeals) held that valu .....

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pression of facts or misdeclaration with an intention to evade duty is baseless as not borne on any tangible evidences rather there is no averment or any material which can create any doubt on bona fide of the assessee s action. Therefore, the notice issued on 10th September, 2004 as well as corrigendum dated 7th June, 2005 and 28th July, 2005 were without any authority of law and are held to be not justified. Thus, the total sum of ₹ 10,34,098/- was honoured by the physical payment by the .....

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the demand was initially as conveyed for the period as demanded in show cause notice dated 10-9-2004 as same was due in terms of the circular dated 6-2-2001. When the parent notice of demand dated 10-9-2004 itself was barred by limitation holding the corrigendum as legal, proper or valid, does not arise. Those were without authority of law. To that extent, the submission of the ld. Counsel and the reliance on case laws as extracted above is very much relevant and are apt to the fact and circumst .....

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. They do not deserve any refund neither on merit nor on limitation. However, jacking them with further liabilities after limitation period is over, is not justified and cannot be maintained and sustained. Therefore, the proceedings started by issuance of show cause notice dated 10-9-2004 and tried to be fortified or enhanced by corrigendum are held to be inappropriate and illegal. Thus, demands and other proposed cause of actions are barred by limitation as provided under provisions of Section .....

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uses of action are barred by limitation as provided under provisions of Section 11A of Central Excise Act, 1944. It is to be seen that the Revenue authorities have not filed any appeal against the said Order-in-Original nor they have filed any cross objection against such findings of the adjudicating authority as regards the demand is hit by limitation. In the absence of any objection of appeal from the department, the findings of the adjudicating authority as regard the limitation have attained .....

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g that the amount already paid was validly paid and was justified on merits. The reasoning is self contradictory. The amount paid was part of duty, demanded in the show cause notice, which was clearly held to be beyond time. Once the demand was held unsustainable, no amount of duty could have been treated as leviable. 6.2 In the aforesaid view, the appeal is devoid of merits raising no substantial question of law. 7. Accordingly, the appeal is dismissed. In view of the above judgment, .....

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