TMI Blog2017 (3) TMI 1001X X X X Extracts X X X X X X X X Extracts X X X X ..... The impugned order relied on para 5.9 of CAS-4 to hold that the cost of goods should be determined on actual capacity basis. In this connection, we note the CBEC vide Circular dated 13/02/2003 advised that the cost of production of goods cleared for captive consumption has been determined in accordance with CAS-4. Para 5.9 of CAS-4 details with absorption of overheads. It stipulates that the basis should be normal capacity or actual capacity utilization of the plant, whichever is higher - the appellants had furnished complete details required for determining normal capacity in terms of the applicable cost accounting standards. We find that the details submitted by the appellants have not been examined and commented upon by the lower authorities - matter remanded for re-examination. Appeal allowed by way of remand. - Excise Appeals No. 3872 and 3916 of 2006 and 3684 of 2005 with Misc. Applications No. 50760-50761 of 2016 - A/52106-52108/2017-EX[DB] - Dated:- 6-3-2017 - Shri S.K. Mohanty, Member (Judicial) And Shri B. Ravichandran, Member (Technical) Shri Amit Jain, Advocate for the appellant Ms. Neha Garg, Authorized Representative (DR) for the respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted mainly on the following grounds :- (i) the order for final assessment was issued after due examination of data submitted by the appellants by the Competent Jurisdictional Assistant Commissioner. The said order has not been reviewed for appeal. However, the Commissioner proceeded and issued a show cause notice against the finding in the said order and decided the case afresh, holding that there is a suppression of material facts by the appellant. There is no suppression of any fact. The verification of appellant s own records and by applying a different interpretation on the allegation of overheads, the Revenue proceeded against the appellant. Reliance was placed by the Commissioner on the provision of sub- Section (5) of Section 35E of Central Excise Act, 1944. He held that no review is required in the present case. The facts as revealed on scrutiny of records resulted in the proceedings against the appellant and hence Commissioner concluded that the said proceedings are legal and proper. The learned Counsel submitted that Section 35E (5) was introduced but never notified by the Government. It was actually repealed without put into effect. The whole proceedings resulting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant should not contest the differential duty at all. A reference was made to the decision of the Hon ble Supreme Court in Star Industries vs. CC, Imports, Raigarh reported in 2015 (324) E.L.T. 656 (S.C.). 5. The learned AR also submitted that the Department followed the provisions of CAS-4 and the Original Authority recorded detailed reasons before arriving at his conclusion. The calculations of the Assistant Director (Cost) were made available to the appellants and the final order was passed after considering their defence. 6. We have heard both the sides and perused the appeal records. First, we consider the correctness of issue of show cause notices against the appellant when provisional assessments were finalized by orders dated 28/08/2003 and 19/07/2004 of Jurisdictional Deputy Commissioner as Assessing Authority. Admittedly, the said final assessment orders were not subjected to review and further appeal, in terms of Section 35E. Here we note, that the Commissioner justified the issue of show cause notice without resorting to review of the final assessment order. His reliance on the sub-Section (5) of Section 35E is found to be misplaced. The said sub-sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtmental cost audit officers to arrive at different conclusions. There is no allegation that the certificate of Chartered Accountant produced by the appellant, was obtained by suppressing relevant facts from the said Chartered Accountant. In this factual situation, we are not in agreement with the assertion made by the Original Authority in his impugned order, to the effect that there is a material suppression of facts by the appellant and that will justify invoking provisions of Section 11A instead of review under Section 35E of the Act. It is also not clear as to what prevented due verification of all connected records, before finalizing of the provisional assessments, by the Jurisdictional Deputy Commissioner. The said basic records were later verified and it was alleged that the costing has not been done properly. No additional investigation or new information found, formed basis for a fresh proceedings. Accordingly, we hold that the findings of the Original Authority cannot be varied by a proceeding under Section 11A without a review order/appeal proceedings under Section 35E. On this legal ground, we hold that the proceedings resulting in the impugned orders dated 30/09/2005 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apacity or actual capacity utilization of the plant, whichever is higher. Para 4.4 of CAS-2 states that normal capacity is the production achieved or achievable on average over a period or season under normal circumstances taking into account the loss of capacity resulting from plant maintenance. CAS-2 also deals with determination of normal capacity. We note that the appellants had furnished complete details required for determining normal capacity in terms of the applicable cost accounting standards. We find that the details submitted by the appellants have not been examined and commented upon by the lower authorities. We find it fit and proper to set aside the impugned order and remand the matter to the Original Authority for examining the issue afresh for a decision on valuation of the goods cleared by the appellant during the period 01/04/2004 to 31/03/2005. 9. In view of the above discussions and findings, the impugned orders, in appeal Nos. E/3684/2005 and E/3916/2006 are set aside and appeals are allowed. Appeal No. E/3872/2006 is allowed by way of remand. The miscellaneous applications linked are also disposed of. (Order pronounced in open court on 06/03/2017) - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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