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M/s Godrej Consumer Products Limited Versus CCE & ST, Indore

2017 (12) TMI 1091 - CESTAT NEW DELHI

Adjustment of excess paid duty with short paid duty - Intermediate goods - Appellant clears SSFA Noodles to its sister concerns located in tax exempted areas, who use such SSFA noodles in the manufacture of toilet soaps, which are cleared without payment of duty by availing area based exemption - Department was of the view that appellant will not be entitled to adjustment between short paid duty and excess paid duty, since no provisional assessments have been ordered in respect of the assessee. .....

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ficate prepared on the basis of annual cost of production. The appellant has paid duty on a month to month basis on the basis of the cost of the goods for the previous month. When the valuation is finalised on an annual basis, there has been short payment of duty in some months as well as excess payment in other months. The appellant has already paid the excess duty wherever the value as per CAS-4 is more than the value adopted for payment of duty, but after adjusting the excess paid duty in oth .....

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duty payable after deducting adjusting the excess. The adjudicating authority is directed to verify the same and recover only the differential, if any, after such adjustment. - Appeal allowed by way of remand. - Excise Appeal No.50862 of 2017 - A/58465/2017-EX[DB] - Dated:- 20-12-2017 - Mr. (Dr.) Satish Chandra, President And Mr. V. Padmanabhan, Member (Technical) Sh. Amit Jain, Advocate for the appellant Sh. M. R. Sharma, AR for the respondent ORDER Per: V. Padmanabhan The appeal is agains .....

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nufacturers sodium salt of fatty acid noodles (SSFA Noodles) of soaps of different flavours at its factory at Malanpur, which are intermediate products for the manufacture of toilet soaps. Appellant clears SSFA Noodles to its sister concerns located in tax exempted areas, who use such SSFA noodles in the manufacture of toilet soaps, which are cleared without payment of duty by availing area based exemption. During the relevant period, appellant cleared SSFA noodles on payment of duty by determin .....

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ion determined for the entire financial year through a Cost Accountant and if there was any short payment of excise duty based on the CAS-4 derived assessable value, the same was duly paid. However, if it was found at the end of year that excess duty has been paid refund of such excess duty was not claimed by the appellant such differential duty was paid after adjusting the excess paid with the short paid. During the audit of appellant s record, department noticed that on certain occasions, appe .....

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ding the excess payments made by the assessee. The show cause notices for the various periods were originally adjudicated and the differential duty confirmed. However, when appeals were filed against such orders before this Tribunal, the matter was remanded back to the original authority for denovo decisions. Now, the adjudicating authority has passed the impugned order covering the periods from 2007-08 to 2013-14 in which he has confirmed the differential duty demands by taking cognizance only .....

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ing the period under dispute but has confirmed the differential duty only in respect of the short paid duty. He argued that such a stand taken by the adjudicating authority is improper. He relied on the following case laws: i) Jindal Steel & Power Ltd. Vs. CCE, Raipur-I- 2016 (342) ELT 253 (Tri. Del.) ii) Essar Steel India Ltd. Vs. CCE, Raipur- 2017 (345) ELT 139 (Tri. Del.) He submitted that these cases have been decided by the Tribunal on similar facts in which the adjustment of excess pai .....

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by both sides. The goods have been cleared by the appellant to their own sister unit located in tax exempted areas. Consequently, the appellant is require to pay excise duty on goods so cleared. The basis of valuation is also required to be done in terms of Rule 8 of the Central Excise Valuation Rules, 2000 following the Cost Accountant Standards (CAS-4). It is not in dispute that valuation has been done properly as per CAS-4. However, such valuation has been done on the basis of CAS-4 certifica .....

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onths. Such adjustment has not been permitted by the adjudicating authority even in the denovo adjudication. 8. We are of the view that the stand taken by the adjudicating authority is untenable. An identical issue has been considered by the Tribunal in the case of Essar Steel India (supra), in which the Tribunal observed as follows:- 5. We have heard both the sides and perused appeal records including written submission. The admitted facts of the case are that there is no sale of iron ore conce .....

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ever month the value happens to be less than the average annual cost, duty was confirmed. 6. First, we consider the appellant s plea regarding the transaction value arrived at based on costing should be at the time of removal. It was submitted that the scheme of things for excise duty purposes in terms of Section 4 and Rules made thereunder and Central Excise Rules, the duty liability based on self-assessment has to be discharged at the time of removal of goods when the invoices are prepared. Th .....

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iple that time of removal is relevant and, hence, annual costing is not tenable, is unsustainable. The fact remains that while the duty liability has to be discharged at the time of removal of excisable goods in a situation where there is no sale transaction and known value, the deemed transaction value has to be constructed based on costing method which necessarily will involve an averaging of cost for a period, considering all the parameters. It is neither the case of the appellant nor there i .....

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nt case, admittedly no provisional assessment was resorted to by the appellant. Hence, the determination of actual cost much later on the clearance resulted in certain adjustments and payments by the appellant. 8. The appellants referred to guidelines issued by the Institute of Cost & Works Accountants of India on CAS-4. We have perused the same. Para 8 deals with periodicity of CAS-4 Certificates. The guidelines state that the frequency of revising the certificate of cost of production will .....

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he case may be. In such circumstances, it is advisable to compute the actual material cost as per the issue valuation adopted by the assessee for material issues. Further, in the FAQ on CAS-4 the ICAI clarified that cost determination of a product is always for a period and computed on the basis of actual accounts of the company. The costs so determined should be actual cost reconciled with the audited accounts of the company after the accounts for the period is audited. 9. On perusal of the gui .....

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ade on annual costing. As such when the Department arrived at cost on annual average basis the duty liability, excess or shortage has also to be determined on such basis. It is not tenable while for arriving at per unit duty liability the whole year data is considered for costing, for total duty liability only months when short payment was noticed were considered. In other words when CAS-4 based annual costing formed basis for arriving transaction value, the overall duty liability/short payment .....

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