TMI Blog2018 (11) TMI 969X X X X Extracts X X X X X X X X Extracts X X X X ..... the sole consideration - the differentiating fact of the present case is that the appellants are not removing the entire manufactured Silicon Manganese to their Deport rather they are selling the major portion thereof from the factory itself and the remaining is being transferred to the Depot to be sold to the further buyers. The bare perusal makes it clear that Rule 7 is invokable only in the case where the goods are not sold by the manufacturer/ assessee from the factory, which basically is the place of removal. It is in that case only that the transaction value has to be considered as the value at which the manufactured product is sold from the Depot to its buyer. That too, at or about the same time - the Silicon Manganese is simultaneously sold from the factory/place of manufacture itself that too the major portion of the manufacture and it is only the part produced which has been shifted to Depot for further sale to the buyers. The Department has wrongly invoked Rule 7 of Valuation Rules. The transaction value in the present case is the value at which the Silicon Manganese has been sold by the appellant at its factory gate, while transferring the unsold portion thereon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... na Global Ltd. 16.01.14 January, 2013 to Sept. 2013 2,56,671 110/ADJ/ DC/RD-I/CEX/ 2014 dated 30.09.14 Confirmed the full demand alongwith interest and imposed 50% of duty as penalty BHO-EXCUS-002-APP-161-15-16 dated 10.08.15 Confirmed the order of the adjudicating authority and dismissed the party s appeal TOTAL 16,23,090 2. The appellants herein are aggrieved of respective Order-in-Appeals. 3. The relevant facts for the purpose are that the appellants are engaged in manufacture of sponge iron, ingots, billets and silicon manganese. They are availing the credit of Cenvat duty paid on inputs, capital goods and Service Tax paid on input services in terms of Cenvat Credit Rules, 2004 (CCR herein). During the course of scrutiny of ER-I Return of the appellants, Department noticed that the appellants were transferring the manufactured Silico-manganese to their Depot i.e. M/s. Vandana Global Ltd. Nagapur, for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indicating under what circumstances Rule 7 can be invoked and also how the value has to be arrived under the said Rules. The appellant has relied upon M/s. Ispat Industries Ltd. vs. CCE, Nagpur - 2018 TIOL 1576-CESTAT (Mum.) and Greaves Cottons Ltd. vs. CCE, Chennai 2017 (7) GSTN 350 (Tri.- Chennai). The order accordingly, is prayed to be set aside and appeal is prayed to be allowed. 6. Ld. DR, while rebutting these arguments has submitted that the adjudicating authorities below have given a speaking findings that sale of finished goods of the appellant through the Depot is very much covered under the frame work of Rule 4 (1) B of the Central Excise Act, 1944 read with Rule 7 of Valuation Rules 2000. Appellant accordingly has been required to pay the impugned respective differential duty. It is submitted that while arriving at the said decision the adjudicating authority below has even relied the settled case law in this respect wherein it is held that where there is no sale at factory gate valuation has to be done in accordance with Rule 7 of the Central Excise Rules, 2000. The orders have been duly justified and the appeals in hand are prayed to be dismissed. 7. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Section 4 (d) of CEA defines transaction value means; The price actually paid or payable for the goods, when sold, and includes in addition to the amount charged as price, any amount that the buyer 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.] 12. Thus, it becomes clear that the value is a normal price that is the price at which such goods are ordinarily sold by the assessee to a buyer where the buyer is not the related persons and the price is the sole consideration as it was held by Hon ble Apex Court in the case of Tata Iron and Steel Co. Ltd. vs. Collector of Central Excise - AIR 2003 (SC) 144. The above discussed definitions clarifies that if the goods are not sold at the factory gate or a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of Bharat Petroleum Corporation Ltd. vs. CCE, Chennai - 2010 (261) ELT 695 while relying upon a Larger Bench decision of Tribunal in Ispat Industries Ltd. vs. CCE, Raigarh 2007 (209) ELT 185 has held that the transfer of part of production to another plant of the same assessee and balance production sold to independent buyers would not attract Rule 7 of Valuation Rules when the manufactured product is also sold to the customers even at the time and place of removal. It was held that not even Rule 8 of the Valuation Rules is applicable to the situation as the said Rule is also applicable only in a situation where entire production of a particular commodity is captively consumed. The Larger Bench had held that in a case as the one in hand the value as per Rule 4 of the Valuation Rules has to be accepted. 14. In view of the entire above discussion, we are of the opinion that the Department has wrongly invoked Rule 7 of Valuation Rules. The transaction value in the present case is the value at which the Silicon Manganese has been sold by the appellant at its factory gate, while transferring the unsold portion thereon to the Depot. Apparently and admittedly, the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X
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