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TMI Blog2017 (5) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... e freight and octroi cost factor R&D expenses cost factor both have been taken based on accounting period of the previous year but not on the current year. Also the conversion expenses cost was taken based on the accounting for the period of the first 9 month of the previous year and not of the current period. The aforesaid position is subsequent to the said finalisation of the costing certificate for the September/ October of the same year. The costing/ assessable value is required to be revised/ finalised by the appellant based on the accounting data or cost audit report of the same period when the same are available next year. The appellant were therefore clearing the goods for captive consumption on payment of duty based on the assessable value of the previous year audited cost price. It was contended in the show-cause notice that as per Rule 8 of Central Excise Valuation Rules, 2000 the value should be 110% / 115% as applicable of the cost of manufacture of such goods. In the present case as discussed above the cost was wrongly taken based on the previous financial year whereas the cost data of current financial year should have been taken. Accordingly, there was a short payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the cost data regularly. The facts of valuation of goods were in the knowledge of the department. Therefore, there is no suppression of fact hence the demand of extended period is not sustainable. For the same reason, penalty imposed under Section 11AC is also not imposable. In support of his above submission, he placed reliance on the following judgments:- * Savita Chemicals Ltd. vs. CCE 2000 (119) ELT 194 (T) * Tata Libert Ltd. 2003 (159) ELT 326 * Rashtriya Ispat Nigam Ltd. 2005 (179) ELT 65 (T-Bang) Affirmed by Supreme Court in 2007 (208) ELT A40 (SC) * CCE vs. Castrol India Ltd. 2001 (135) ELT 958 * Century Pulp & Paper 2002 (150) ELT 913 5. He further submits that in the appellant's own case on identical facts where the IC engine and parts of tractors were cleared by the appellant to their Nagpur and Rudrapur unit this Tribunal has allowed the appeal on the aspect of revenue neutrality vide order no.A/85373-85374/17/EB dated 16.01.2017. 6. In respect of E/2222/06, he submits that he adopted the submission that the IC engine sold in the market and IC engine supplied to Nashik plant are different therefore, the price of comparable goods is not available. In th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal has considered the issue in hand and the appeal was allowed vide order dated 16.01.2017. 10. As regards the decision of the Tribunal relied upon by the ld. AR we find that subsequent to those decisions, this Tribunal in various cases reconsidered the issue of revenue neutrality and as per the various judgments relied upon by the ld. counsel, different view was taken. Therefore, the decision relied upon by the ld. AR are no more good law and same stands distinguished. 11. The finding of the said Tribunal's order dated 16.01.2017 is reproduced below:- "The appellant is engaged in the manufacture of I.C. Engines and parts thereof at their unit located at Akurli Road, Kandivli (E). The appellants are clearing I.C. Engines and parts thereof to their other units located at Nagpur and Rudrapur for use of manufacture of tractors. The tractors were chargeable to duty for the period prior to 09.07.2004. The period involved in this case is November 1996 to March 2001. In one appeal the appellant is Automotive Division and manufactured motor vehicles parts and cleared to their own other units located at Igatpuri, Nashik and Zaheerabad. The dispute in the present case is that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atpuri, Nashik and Zaheerabad where during the relevant period recipient units have paid duty in PLA to the tune of Rs. 16.41 crores. In this fact the payment of duty by the appellant and availment of MODVAT/CENVAT credit by their own recipient units is revenue neutral exercise. For this reason also the demand should be dropped. In this support he placed reliance on the following judgments:- (i) CCE Vs Special Steel Ltd - [2015 (329) ELT 449 (T)] (ii) CCE & C Vs Indeos ABS Ltd - [2010 (254) ELT 628 (Guj.)] (iii) CCE & C Vs Gujarat Glass Pvt Ltd - [2013 (290) ELT 538 (Guj.)] (iv) Nirlon Ltd Vs CCE - [2015 (320) ELT 22 (SC)] (v) STI Industries Vs CCE - [2015 (327) ELT 514 (T)] (vi) CCE, C & ST Vs Tarapur Grease India Pvt Ltd - [2016 (334) ELT 416 (Bom.)] He further submits, in the above judgments, it was also held that in case there is revenue neutrality suppression of fact with intent to evade the duty does not exist, therefore the longer period of demand is not invocable. 3. Shri V K Agarwal, Additional Commissioner (AR) appearing on behalf of the Revenue reiterates the findings of the impugned order. 4. We have carefully considered the submissions made by bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom order-in-original itself. The only procedure that was required to be complied with was clearance of the raw materials after reversing the credit availed on it. Thus, the duty amount should have been paid and thereafter when these inputs or raw materials were utilized in the manufacture of the final product, the Cenvat credit could have been claimed but this procedure was not followed. It may be, as observed by the adjudicating authority, that this mode of clearance gives some temporary benefit to the associate companies but the objection raised was of diversion of goods. That case could not be substantiated by the Revenue as is evident from even Paragraph 67.10 of the order of the adjudicating authority. 6. In our view, therefore, merely because the penalty has been notionally imposed on all the assessees, does not mean that the Tribunal's earlier conclusion, and by applicability of the principle of revenue neutrality, is perverse or vitiated by any error of law apparent on the face of record. Imposition of the notional penalty is for infraction of some procedural rule. That has no bearing on the main issue." CCE Vs Special Steel Ltd - [2015 (329) ELT 449 (T)] "7. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of any nature in raising such a demand was indicated and the demand was confirmed merely by relying upon demand chart which is an annexure to the SCN. As we find no allegations for demand has been stated either in the show cause notice nor there are any reasoning in the impugned orders for confirmation of such demand, we are of the considered view that such demand cannot be confirmed as it is not in accordance with law. As regard plea of revenue neutrality raised by the ld. Counsel, we find strong force in the contentions as there is no dispute that clearances were made by M/s. STI to their own DTA unit and the credit of SAD and CVD was available to the DTA Unit, hence the entire issue is revenue neutral. In such case it cannot be said that there has been intentional evasion of payment of duty by the appellant-assessee. We find that the goods were cleared on invoices indicating all the particulars and we do not find any deliberate act on the part of the assessee to evade payment of duty. We are of the view that the demands raised by invoking extended period of limitation on this count are not invokable. For the foregoing reasons also we hold that the demand of SAD and CVD is unsu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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