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Commissioner of Central Excise, Nashik Versus CEAT Ltd

2017 (11) TMI 605 - CESTAT MUMBAI

Valuation - removal of input to sister unit - whether valuation of removal of input as such to sister unit should attract payment of duty equal to Cenvat credit availed thereon or under Section 4 of Central Excise Act, during the period 1-4-2001 to 31-12-2003 in terms of Rule 57AB(1)(c) of the Central Excise Rules, 1944 and Rule 3(4) of Cenvat Credit Rules, 2001/2002? - Held that: - issue and facts of the present case is squarely covered by the Hon’ble Apex Court in case of Ispat Metallics I .....

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mesh Nair The issue involved is whether valuation of removal of input as such to sister unit should attract payment of duty equal to Cenvat credit availed thereon or under Section 4 of Central Excise Act, during the period 1-4-2001 to 31-12-2003 in terms of Rule 57AB(1)(c) of the Central Excise Rules, 1944 and Rule 3(4) of Cenvat Credit Rules, 2001/2002. 2. Shri. N.N. Prabhudesai, Ld. Suprintendent(A.R.) appearing on behalf of the Revenue reiterating the ground of appeal submits that as per the .....

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Commissioner of Central Excise, Cochin Vs. BPL Ltd[2000(124)ELT 836(Tri.)] (c) Collector of C. E. Vs. Modern Food Industries (I) Ltd[1988(37)ELT 294(Tri.)] (d) Jay Yushin Ltd VS. Commissioner of Central Exicse, New Delhi[2000(119)ELT 718(Tri. LB)] (e) Cropmton Greaves Ltd Vs. Commissioner of C. Ex. Aurangabad[2004(177)ELT 1032(Tri. Mum)] (f) Bayer ABS Limited Vs. Commissioner of Central Excise, VAdodara[2012(281)ELT 296(Tri. Ahmd.)] (g) Shahnaz Ayrvedics Vs. Commissioner of Central Excise, Noid .....

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n respect of removal of input as such cannot be added to calculate the excise duty. He further submits that extra amount charged by the respondent to their sister unit is only on account of freight, loading and unloading and octoroi which is otherwise not includible in the assessable value even under Section 4. 4. On careful consideration of submissions made by both sides, we find that issue and facts of the present case is squarely covered by the Hon ble Apex Court in case of Ispat Metallics In .....

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l to the duty of excise which is leviable on such goods at the rate applicable to such goods on the date of such removal and on the value determined for such goods under Section 4 of the said Central Excise Act, and such removal shall be made under the cover of an invoice referred to in rule 52A." "Rule 3(4)When inputs orcapital goods, on which CENVAT credit has been taken, are removed as such from the factory, the manufacturer of the final products shall pay an amount equal to the dut .....

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nder the Tripartite Agreement between the two of them and the supplier of the said pellets. This is a pure finding of fact and Shri Radhakrishnan has not been able to dislodge this finding of fact. This being the case, the application of the circular of 1-7-2002 becomes important. Paragraph 14 of the said circular reads as under :- 14 How will valuation be done when inputs or capital goods, on which Cenvat credit has been taken are removed as such from the factory, under the erstwhile sub rule ( .....

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are removed as such to a sister unit of the assessee or to another factory of the same company and where no sale is involved. It may be noticed that sub rule (1C) of Rule 57AB of the erstwhile Central Excise Rules, 1944 and Rule 3(4) of the Cenvat Credit Rules 2001 (now 2002, talk of determination of value for such goods and not the said goods. Thus, if the assessee partly sells the inputs to independent buyers and partly transfers to its sister units, the transaction value of such goods would b .....

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ovisions of Rule 8 of the valuation Rules would have to be invoked. However, this would require determination of the cost of production or manufacture, which would not be possible since the said inputs/capital goods have been received by the assessee from outside and have not been produced or manufactured in his factory. Recourse will, therefore, have to be taken to the residuary Rule 11 of the valuation rules and the value determined using reasonable means consistent with the principles and gen .....

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