TMI Blog2017 (5) TMI 597X X X X Extracts X X X X X X X X Extracts X X X X ..... ity has only made a passing reference thereof and has not analyzed the applicability thereof and to what extent, to the disputed period prior to 01-07-2000. There is legal infirmity in the impugned order due to non-application of law in its letter and spirit - matter remanded for de novo consideration by original authority who will threadbare examine the material facts and considering the pleadings of the appellant, both on fact and law shall test the evidence and apply relevant law, to pass appropriate order recording reason of its decision - appeal allowed by way of remand. - E/536/2010 - A/30533/2017 - Dated:- 12-4-2017 - Shri (Dr.) Satish Chandra, President And Shri Madhu Mohan Damodhar, Member (Technical) Shri B.N. Gururaj, Advocate, For the Appellant Shri Arun Kumar, (AR), For the Respondent ORDER Per : Madhu Mohan Damodhar The brief facts of the case are that appellants are engaged in the manufacture of Polystyrene falling under Chapter sub-heading No.3903.10 of the Central Excise Tariff. They are clearing polystyrene of different grades of factory gate as well as on stock transfer basis to their depots / consignment sales agents (CSAs) across ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 96,98,677 3,76,18,520 2,80,18,840 The first 5 notices were adjudicated by Commissioner vide OIO dt. 05-09-2009 in favour of Revenue which, on appeal to CESTAT, was set aside and ordered for de novo adjudication after following principles of natural justice vide a Final Order No.84/2009 dt. 26-02-2009. Accordingly, these five notices (in de novo adjudication) as also the SCNs at Sl.Nos.6 to 11 in the above table were taken up for common adjudication. After due process of adjudication, vide OIO dt. 31-12-2009 (Impugned Order), the total of the amounts proposed in the aforesaid 11 notices amounting to ₹ 3,76,18,520/- was confirmed by the adjudicating authority, along with interest liability thereon. Penalties of ₹ 1,12,10,234/- under Section 11AC of the Central Excise Act and ₹ 10,00,000/- under Rule 25 of Central Excise Rules, 2002 were also imposed. Aggrieved, the appellants are before this form in appeal. 2. On 23-02-2017, when the matter came up for hearing, Ld. Counsel, Shri B.N. Gururaj appearing for the appellants reiterated th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 6,85,839/-. (viii) On limitation, the department has engaged in correspondence with the appellant since 17-05-2000, but has issued notice in April 2004. Hence, the demand under the first show cause notice is barred by limitation. Consequently, penalty under section 11AC is also liable to be set aside. 3. On the other hand, Shri Arun Kumar, Ld. A.R appearing for Revenue, supports the adjudication. 4. We have heard both sides and have gone through the records. 5. Demand of duty is based on sale price at the depot and place of consignment of agents of the appellants. Demand is based on the concept of place of removal between September 1999 and June 2000 and thereafter based on Rule 7 of the Central Excise (Determination of Price of Excisable Goods), Rules, 2000. The first SCN dt.29-04-2004 for the period September 1999 to September 2003 has invoked extended period of limitation and other notices, however, have been issued under normal period of limitation. 6. We find that the periods covered in this appeal have undergone different phases of law in respect of method of valuation to be followed and the concept of place of removal thereof. We find that in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (4) For the purposes of this section, - (a) .... .... .... (b) place of removal means - (i) a factory or any other place or premises of production or manufacture of the excisable goods; (ii) a warehouse or any other place or premises wherein the excisable goods have been permitted to be deposited without payment of duty; (iii) a depot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory and, from where such goods are removed; 1.5 According to the above definition, the places enumerated in the definition were recognised to be place of removal to determine assessable value of the excisable goods cleared therefrom. Accordingly, normal price charged to non-related buyers in the course of wholesale trade for delivery at the time and place of removal was recognised to be transaction value. 1.6 The expression time of removal was defined by section 4(4) (ba) of the Act as under : SECTION 4 Valuation of excisable goods for the purpose of charging of duty of excise - .... .... .... (4) For the purposes of this section, - (a) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is liable to pay to, or on behalf of, the assessee, by reason of, or in connection with the sale, whether payable at the time of the sale or at any other time, including, but not limited to, any amount charged for, or to make provision for, advertising or publicity, marketing and selling organization expenses, storage, outward handling, servicing, warranty, commission or any other matter; but does not include the amount of duty of excise, sales tax and other taxes, if any, actually paid or actually payable on such goods. 1.12 Rule 7 of Central Excise (Valuation) Rules, 2000 w.e.f.1.7.2000 prescribed mode of valuation of goods cleared as under : RULE 7 : Where the excisable goods are not sold by the assessee at the time and place of removal but are transferred to a depot, premises of a consignment agent or any other place or premises (hereinafter referred to as such other place ) from where the excisable goods are to be sold after their clearance from the place of removal and where the assessee and the buyer of the said goods are not related and the price is the sole consideration for the sale, the value shall be the normal transaction value of such goods sold from su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remises from where the excisable goods were sold after clearance from the factory were treated as 'places of removal'. Such places of removal was significant to ascertain the price prevailing thereat at the time of removal of excisable goods therefrom. Law contemplated that the price prevailing at a relevant point of time at the place of removal was to be considered as normal transaction value . Therefore, the term time of removal was defined to specify the moment of removal of the goods from the places referred to in sub-clause (iii) of clause (b) of Section 4(1) (a) of the Act to rule out abnormality and anomaly in valuation of excisable goods. That was deemed to be the time at which excisable goods were cleared from the factory. .. . .. . The first dose of amendment came into force with effect from 28.9.1996 and second dose of amendment came into force w.e.f. 1.7.2000 and remained in force till 13.5.2003 which prescribed the principles relating to determination of assessable value. The law prevailing at the relevant point of time has following propositions :- (i) Normal price is the basis to determine the assessable value of cle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herein before. 8. Even a cursory perusal of the impugned order will indicate that the adjudicating authority has not analysed the contentious issues with respect to changes in law that were effected on at least two occasions during the entire period of dispute. While the period of disputes starts from 09/1999, the adjudicating authority has considered the law only from 01-07-2000 when Section 4 of the Central Excise Act was substituted vide Finance Act, 2000. This is very evident from para-15 of the impugned order. There also appears to be merit in the contention of the appellant. Although there is some discussion on provision of law prior to 01-07-2000 in para-25 of the order, however, the authority has only made a passing reference thereof and has not analyzed the applicability thereof and to what extent, to the disputed period prior to 01-07-2000. Lower authority appears to have prejudged the issue and confirmed the huge demand amounting to ₹ 3,76,18,520/- without adequate analysis and application of mind. 9. In these circumstances, we find legal infirmity in the impugned order due to non-application of law in its letter and spirit. The issues involved in this app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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