TMI Blog2016 (4) TMI 233X X X X Extracts X X X X X X X X Extracts X X X X ..... nd submitted cost certificate. Considering the period of dispute and taking into the original demands as proposed in the four SCNs the demand amount of ₹ 251 Crores has been scaled down on account of the directions by this Tribunal’s Two Final orders, and the original demand reduced to ₹ 13.98 Crores. Therefore, we hold that the appellant's contention for remanding the case to the adjudicating authority is not justifiable except to delay the proceedings without any valid grounds. The appellants pleading for Revenue neutrality is also not justified and we find all along they never claimed this aspect in the initial proceedings when the demand was confirmed by the Commissioner and when the case was before this Tribunal twice. Therefore, we hold that there is no justification for their claim on Revenue neutrality. Therefore, taking into account all the above facts, we uphold the impugned order in determining the cost of copper anodes for the period July 2001 to March 2002 as ₹ 94,446/- per MT and ₹ 94,594/- per MT for the period April 2002 to October 2002. Consequently, the demand of ₹ 13,98,95,514/- and interest thereof is liable to be upheld. Disallo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jagopalan, Spl. Counsel ORDER PER: R. PERIASAMI Appellant filed seven miscellaneous applications in respect of all the three appeals viz., E/MISC/40439/15, E/MISC/40440/15 E/MISC/40441/2015 in E/295/2009, E/MISC/40442/15, E/MISC/40443/15 in E/406/2010, E/MISC/40436/15, E/MISC/40437/15 in E/412/2010 requesting for change of cause title from M/s. Sterlite Industries (I) Ltd. to M/s. Sesa Sterlite Limited and from M/s. Sesa Sterlite Limited to M/s. Vedanta Limited. It is submitted that M/s. Sterlite Industries Ltd. has been merged with M/s. Sesa Sterlite Limited and it was approved by the Honble High Court of Goa and Madras and submitted the Certificate of incorporation dated 18.09.2013 issued by ROC, Goa. Subsequently, the name of the Company M/s. Sesa Sterlite Ltd. has been renamed as M/s. Vedanta Ltd. and the appellants submitted the Certificate of incorporation dated 21.04.2015 from ROC, Goa. Accordingly, change of cause title from M/s. Sterlite Industries Ltd. to M/s. Sesa Sterlite Ltd., to M/s. Vedanta Ltd., is allowed. All the seven miscellaneous applications for change of cause title from M/s. Sterlite Industries Ltd., to M/s. Sesa Sterlite Ltd. and from M/s. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before Tribunal the Dy. Commissioner also confirmed the demand of differential duty by following for the period 01.07.2001 to 31.07.2001, the assesee challenged the Order in Original s and the Commissioner (Appeals) rejected their appeal and on appeal, the Tribunal in its Final Order No. 1111-1115/2005 dated 09.08.2005 set aside the impugned order and directed the LA to determine the cost as per CAS-4 formula. During pendency of appeal before Tribunal, the department issued SCN s dated 26.07.2002, 02.05.2003, 05.08.2003 and 29.07.2003 demanding differential duty. The appellant submitted Cost Certificate issued by the Cost Accountant arriving cost as per CAS-4 standard. The Commissioner referred the issue to Dy. Director (Cost) who in turn after examining the records submitted his report and the same was given to the assesse. Assesse filed submission and contested Dy. Director (Cost) report after following the principle of natural justice and hearing the appellants. The Commissioner of central Excise in his order dated 15.04.2009 confirmed the demand of deferential of ₹ 13,98,95,414/- and imposed a penalty of ₹ 2 5,00,000/- under Rule 25 of CER, 2001 and dropped penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... volume I and submits that he relied OIO at page 124, where the Commissioner held that the no provisional assessment for the period from July 2001 to October 2002 covering in four SCNs prior to 01.11.2002 is valid since provisional assessment was ordered with effect from 01.11.2002 and he was explaining the date of events stated in page1 of the synopsis, where he submitted that provisional assessment was initially ordered on 01.11.99. He drew attention to the bank guarantee dated on 04.12.2000 and bank guarantee submitted on 21.02.2001 and their letter dated 17.07.2002 requesting the Asst. Commissioner to continue the provisional assessment through their letter dated 16.10.2002. In response to DCs letter dated 12.08.2002 bank guarantee was reviewed for the period of one year. He relied n the letter dated 21.02.2012, 28.10.2012, 01.11.2012 and submitted that provisional assessment continued for the entire period whereas the Commissioner has taken as provisional assessment from 01.11.202 and not from 01.11.1999. 7. On the issue of foreign exchange fluctuation, he submitted additional evidence and citations. On the merits of the case, he submits that the Commissioner has enhanced t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate Limited - 2009 (13) SCC 1. 8. The Ld. Advocate submitted additional evidence that as per CESTAT procedural rules and Regulations, 1982, 223 of the Rules the Tribunal is empowered to accept the additional evidence and he explained the individual additional evidence which they proposed to rely are as under:- 1. CA certificate (annx-1 vol 5) dt 06.05.2013. 2. Statement of Cenvat PLA Balance of Tuticorin unit- Annex -II 3. Note on accounting of foreign exchange fluctuation. 4. Certificate dt 28.05.2013 by cost Accountant 5. Method of accounting adopted by the Dy. Dir (cost). Time taken for conversion from anode to cathode at their Silvasa unit. However, he submits that these evidences should be looked into by the adjudicating authority in support of his additional evidence, he relied on the following case laws:- 1. Excel Rubber Ltd. Vs. CCE, Hyderabad 2011-TIOL-536 2. Toyota Kirloskar Auto Parts PVt. Ltd. Vs. CCE 2012 (276) ELT 332 (Kar.) 3. ITC Bhadrachalam Paperboards Ltd. Vs. CCE, HYD 2000 (115) ELT 527 (Tri.) 4. S.L. Kapoor Vs. Jagmohan Others 1980 (4) SCC 379 9. Ld. Advocate submits that in view of their applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue submitted their comments on the synopsis filed by the appellants. He submits that the entire valuation was done in accordance with CAS 4 guidelines since the copper anode is captively consumed by the appellant s unit at Silvassa. He briefly discussed the manufacture and how the adjudicating authority arrived his findings. He submitted a paper book containing brief submissions of balance sheets plus work sheets, control plans, copies of cash drawn statements and extracts of balance sheets. He submits that the adjudicating authority has dealt the issue in detail. Regarding the appellant s submission for remand, he submits that there is no ground for remanding the case to the adjudicating authority as the adjudication order was passed after 15 years. Regarding DD cost report he submits that the appellants were given sufficient opportunity by the Commissioner before adjudication by forwarding the DD cost note with the direction that appellant to meet DD cost and expenditure and clarify the points whereas they have not submitted the figures. Therefore the appellants submissions that no notice was given on the DD cost report is not maintainable. He also submits that if the case i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certificate, which was obtained later on after four years of OIO issued that cannot be taken as additional evidence now. Regarding PLA account pertaining to Silvassa to be taken as evidence, he submits that it is not relevant for the present appeal. Regarding CA certificate produced as additional evidence, explaining not on accounting of forex may not be accepted as additional evidence. He further submits that no evidence was produced before the Commissioner either during the adjudication or after the issue of SCN. He also submits that on the other additional grounds and additional evidences, there was no valid reason to submit by the appellant as to why they could not raise these before the Commissioner particularly when they took sufficient time to reply to the SCN. When Mr. Kannan, Cost Accountant has already submitted that cash flow report which they enclosed at page 34A C of paper book, there was no justification to produce clarification and this cannot be accepted as additional evidence or additional grounds. He also submitted that the case laws relied upon the following case law:- 1. K.R. Engg. Works Vs. CCE, Bangalore-2000 (125) ELT 1218 (T) 2. Kneader House Vs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . He submits that copper anodes, is the final product in the appellants unit at Tuticorin, which is treated as deemed export whereas the copper cathodes is exported from their unit at Silvassa. The adjudicating authority has correctly worked out as per the SION norms available for copper anodes. He referred to para 25 at page 128 of volume-I. he also submits that norms for blister copper is 1.04 is not relevant. f. He further submits that on the difference between PLA account and the trial balance, the Commissioner has correctly added the differential value of 4.92 crores (page 2 of the paper book). He also relied on the trial balance at page 9 A/C. No. 74101, 74201, 74203, 74301 and submits that they have taken power charges as per TNEB rates is not supported with any evidence as the trial balance itself shows clearly the power charges. He submits that the sale of sulphuric acid deducted twice whereas deduction is allowed once only. He drew the attention of the Bench to page 13 of the paper book and page 34B and 34E in this regard, where the figure of ₹ 70,93,398.30 is arrived after deduction of consumption of sulphuric acid. The amount of ₹ 14,58,07,640 which is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of DD cost figure, but the same has not been considered by the Commissioner. He relied on Automotive Tyre manufacturers Association Vs. Designated Authority and Ors. - 2011 (263) ELT 481. 13. We have carefully considered the submissions made by both sides and also examined all the relevant records and examined the grounds of appeal. We find the appellants also filed two miscellaneous applications No. E/MISC/40811/2013 and No. E/MISC/40810/2013 in E/295/2009 seeking submission of additional evidences and additional grounds. Appellants contended that these evidences are essential and therefore prayed to take them on record under Section 35C and under Rule 23 of Cestat Procedural Rules. The additional evidences are as follows: a) First evidence is the CA Certificate dated 6.5.2013 issued by M/s. Ramakrishna Co., Chartered Accountants, along with details of Cenvat credit position and data of PLA payment ascertained from the statutory PLA Cenvat register maintained under the Central Excise and CCR forte licensed units for the period April 2000 to October, 2000. b) The second evidence is Annexure-2 consisting of statement of cenvat and PLA balances of Tuticorin unit for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the scope of CAS-4 certificate dated 23.12.2005. The Cost Accountant issued CAS-4 certificate in the year 2005 and again in 28.05.2013 he had choose to issue clarification. We find when the same Cost Accountant who was also present during the personal hearing proceedings before the Commissioner of Central Excise and assisted the appellants through explanation in the form of certificates has no relevance at all and these cannot be considered as additional evidence, since the issue was well known to the appellant from 1997 to 2009, till passing of the adjudication order as well as Commissioner (Appeals) order, all the documents and evidences relied before the lower authorities below are full and complete. In this regard citations relied by the appellants in the case of Excel Rubber Ltd. Vs. CCE, Hyderabad (supra), Toyota Kirloskar Auto Parts PVt. Ltd. Vs. CCE(supra), ITC Bhadrachalam Paperboards Ltd. Vs. CCE, HYD(supra), and other citations are clearly distinguishable and not applicable to the present case. We rely on the case of K.R. Engg. Works Vs. CCE, Bangalore - 2000 (125) ELT 1218 (Tri.) and Kneader House Vs. CCE, Delhi - 2013 (290) ELT 249 (Tri.-Del.), wherein the Principal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the dispute started in the year 1996-97 and the Commissioner of Central Excise ordered cost audit under Section 14 A. The Cost Auditor computed the cost of production as ₹ 1,30,802.38 and ₹ 1,32,738.80 per MT for the period July 1996-97 and July 1997 - December, 1997 respectively. Based on the Cost Audit Report, the adjudicating authority determined and finalized the value at ₹ 94,416.45 per MT for the period July 1997 to December 1997 and confirmed the differential duty. On appeal filed by both assesse and Revenue before the Tribunal, the Tribunal in its Final Order No. 285-288/2009 dated 24.03/2009 set aside the order and directed the authority to determine the value as per CAS-4 as per the Board s Circular. In other round of litigation arising out of AC s order, the adjudicating authority has confirmed the demand of differential duty for the period 0.07.2000 to 30.06.2001 by relying Cost Audit Report and Commissioner s order above. On appeal, the Commissioner (Appeals) upheld the order and on appeal this Tribunal in its order No. 1111-1115/2005 dated 09.08.2005 set aside the impugned order and directed the authority to determine the value as per CAS4. During ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants are not contesting ISO-TQM charges, Professional fee and testing charges and Excess sale value of sulphuric acid shown in P L account. 17. On the second appeal No. E/412/2010, the appellant before this Tribunal against the Commissioner (Appeals) order only on the limited ground of not allowing the adjustment of excess duty paid as against the shortage during the relevant period. Whereas, the Revenue is on appeal against the Commissioner (Appeals) order, wherein he has allowed certain deductions in respect of foreign Exchange fluctuation, ISO-TQM charges, analysis charges and sale value of sulphuric acid shown in P L account etc. 1. From the above background the issue before the Tribunal is whether the additions made by the adjudicating authority on various heads in CAS4 for determining the cost of production and for determining the value under Rule 8 of CVR is correct or otherwise; 2. Whether the value determined by the adjudicating authority of ₹ 94,446/- per MT for the period Jul 2001 - March, 2002 and ₹ 94,594/- per MT for the period April 2002 to October, 2002 is correct or otherwise, 3. Whether the penalty imposed by the adjudicating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inclusion of ₹ 1,19,24,360/- is attributable to procurement of imported raw materials, we find that the appellants contended that this amount is on account of fluctuation in foreign exchange as the raw material copper concentrate was imported and the international price of copper is based on LME price and also at the time of shipment the price was provisional and at the time of final settlement, the exchange fluctuation on the date of payment varies and this resulted in difference in price. It is pertinent to see that as per para-4 of CAS-4 the cost of production shall constitute cost of material consumed and all other expenses. The appellant relied guidance note on cost accounting CAS-6 para-5.17 and illustration thereof. In the present case we find that when the appellant procured/imported copper concentrate from overseas and the goods were accompanied with provisional invoices and subsequently on receipt of the final invoices the bills were settled accordingly. On perusal of the provisional invoices No. HWY14/011 (page 48) of Vol-II dated 07.06.2001 issued by M/s. Thalanga Copper mines, Australia, for the supply of highway copper concentrate, it is sen that the terms of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ented that the figures could be as per P L account. The appellant failed to give any justification for the amount shown in the TB. TB is prepared for each unit where the cost of each product of the plant has been worked out separately and it is the basic background for compiling final P L account. In the absence of any evidence we hold that the adjudicating authority has rightly added the above amount as per CAS-4 and as per DD (Cost) report. Hence we uphold the findings of the adjudicating authority on this account. III. Analysis charges: As regards the analysis charges and the expenses regarding demurrage and other charges and differential customs duty and promotion of DEPB and deduction of sale value of sulphuric acid as shown in P L account (sl.No. 9 15) and 14 15 of the list above, the adjudicating authority s findings has clearly brought out and as per DD (Cost) report and as per CAS-4 all these charges are liable to be included for determining the cost of the raw materials. The appellants contention that these charges were already included in the cost of raw materials is not justified for the reason that if it is already included in the cost of raw materials, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duction and included the differential amount in the cost. Therefore, we do not find any merit in the appellants contention. Accordingly, we uphold the addition of cost as per CAS-4. 21. Having discussed all the issues of addition of cost as per CAS-4 formula, we hold that the adjudicating authority has correctly determined the cost of production of copper anodes manufactured by the appellants. We find that the adjudicating authority has not merely or plainly adopted the DD (Cost) report for addition of the cost elements under CAS-4 and the very fact that the adjudicating authority has over ruled on six items for disallowing the addition proposed by the DD (Cost) and allowed the addition clearly shows that he has applied his mind and the direction of this Tribunal orders and correctly determined the cost as per CAS-4 for copper anodes as ₹ 94,446/- and ₹ 94,594 per MT as against the DD (Cost) proposal of ₹ 1,30,802.38 and ₹ 1,32,738.80 per MT. We also find that during the proceedings the appellants cost auditor was also represented and submitted cost certificate. Considering the period of dispute and taking into the original demands as proposed in the fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CAS-4 formula and consequential demand of differential duty. Further, we find that since the facts have already been admitted before the adjudicating authority and LAA, they have admitted that they have already availed cenvat credit on the duty paid on copper anodes at their unit at Silvasa and they have also admitted before LA that they will not claim any refund on this account. Therefore, in view of the above factual position, the appellants claim for adjustment and claiming automatic set off excess duty paid does not arise. Accordingly, we uphold the order of the Commissioner Appeals) to that extent. 23. As regards the Revenue appeal No. E/406/2010 is concerned, the adjudicating authority in his OIO dated 14.05.2009 while determining the cost of copper anodes, he has added various cost elements as per DD (Cost) Report and the Cost certificate produced by the appellants as per CAS-4 and determined the value as ₹ 99742 per MT andconfirmed the differential duty. Whereas, the LAA in the impugned order allowed deductions from cost in respect of foreign exchange fluctuation, analysis charges, ISO-TQM charges and deduction of sale value of sulphuric acid etc., and held that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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