TMI Blog2019 (9) TMI 1542X X X X Extracts X X X X X X X X Extracts X X X X ..... pted granules. The appellant has paid the amount @ 6% of exempted granules used captively for manufacture of reprocessed granules which were partly cleared on payment of 6% of the value of exempted goods or used in manufacture of DOPB films and is entitled for benefit of exemption of Notification No. 67/95, dated 16-3-1995 - There are no merit in the impugned order, the same is set aside. Appeal allowed - decided in favor of appellant. - E/60073/2018 - A/61250/2019-EX(DB) - Dated:- 5-9-2019 - Shri Ashok Jindal, Member (J) and C.L. Mahar, Member (T) Shri V. Swaminathan, Advocate, for the Appellant. Shri Vijay Gupta, Authorised Representative (DR), for the Respondent. ORDER The appellant is in appeal against the impugned order confirming the demand against the appellant holding that the appellant are liable to pay duty and on waste arising during the course of manufacture of DOPB films which were captively used by the appellant for manufacture of reprocessed granules which are exempt from payment of duty in terms of Rule 8 of Valuation Rules, 2000. 2. The fact of the case are as under :- 1. Max Speciality Films Ltd., (previously known as Max India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of the waste captively consumed is correct and is in order and dropped the proceedings. This order dated 30-12-2004 passed by the Commissioner attained finality on the issue as the department did not file any Appeal against the said order. (Annexure at Page 43 of the Paper book). 5. Thereafter, the department issued a 2nd show cause notice dated C.No. V/15/39/CE/MIL/76/2005/9146-47, dated 5-12-2005 on the very same issue for the subsequent period January, 2005 to June, 2005 involving a demand of ₹ 2,77,496/-. Both the Assistant Commissioner and the Appellate Commissioner vide Order dated 27-4-2006 and 30-1-2008 respectively dropped the proceedings by following the earlier 1st order dated 30-12-2004 passed by the Commissioner, Jalandhar referred to above. The 2nd Appeal filed by the Department in the CESTAT against the order of the Commissioner (Appeals) was also dismissed vide their Order No. 319/2008-EX, dated 22-5-2008 [2008 (231) E.L.T. 159 (Tri. - Del.)]. The 3rd appeal filed by the department in the Supreme Court against the CESTAT order dated 22-5-2008 was also dismissed by the Apex Court vide order dated 19-2-2016 on the ground that tax effect is low [2016 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) The Commissioner had also imposed equivalent amount of Penalty on the Appellant under Sec. 11A of the Act ibid. The impugned order passed by the Commissioner is presently the subject matter of Appeal before this Hon ble Tribunal. 3. The Learned Counsel for the appellant submits as under :- FOR THE PERIOD PRIOR TO UPTO AND INCLUSIVE OF 30-11-2013, INVOLVING A DEMAND OF ₹ 23.74 CRORES. The issue in question has been settled once and for all by the Supreme Court, High Court, Tribunal (in Appellant own case for the earlier period) including the Larger Bench, and Departmental Adjudication which had attained finality. (A) At the outset, it is submitted that as already stated above, the issue involved in the impugned order has attained finality by the order-in-original No. 124/CE/JAL/2004, dated 30-12-2004 passed by the Commissioner of Central Excise, Jalandhar for the period April, 2003 to February, 2004. This is the 1st order on the subject issue which has been accepted by the department without filing any appeal and hence attained finality. Therefore, on the basis of this order, the subsequent show cause notices for the period upto and inclusive of 30-11-20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal in para 5 of their decision in the case of Commissioner of Central Excise, Aurangabad v. Sterlite Optical Technologies Limited reported in 2018 (359) E.L.T. 723 has clearly held that The law of the land takes precedence over the circulars issued by the C.B.E. C. and also any letters issued by the Revenue by way of audit or by show cause notice . (E) As regards the Apex Court decision in the case of Steel Complex Limited referred to above, the Commissioner in para 4.6.5 has observed that the said decision is applicable only to a loss making unit even though the Supreme Court had categorically held that Rule 8 of Valuation Rules has no application in a situation where the goods are partly sold on ex-factory basis and partly consumed captively. (F) The Appellant, before the Commissioner, also placed reliance on the decision of the Larger Bench of the CESTAT in the case of Ispat Industries Ltd. v. CCE - 2007 (209) E.L.T. 185 (LB) wherein it has been held that Rule 8 of Valuation Rules would apply only in a situation where 100% of the quantity of the goods were consumed in the same factory for captive consumption or were transferred to another factory for consumption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ical finding has been given that Rule 4 of the said Rules has to be preferred over Rule 8 of Valuation Rules. FOR THE PERIOD W.E.F. 1-12-2013 INVOLVING A DEMAND OF ₹ 6.14 CRORES (UPTO JULY, 2015) IMPOSSIBLE AND IMPRACTICAL TO DETERMINE THE COST OF PRODUCTION OF WASTE UNDER CAS-4 METHOD. (a) As already stated, Rule 8 of Valuation Rules was amended vide Notification No. 14/2013 w.e.f. 1-12-2013 to provide that for the purpose of valuation of the goods, where the goods are partially sold by the assessee to independent customer and partially captively consumed, the goods sold would be assessed on the basis of transaction value under Sec. 4 and the goods captively consumed would valued under Rule 8 i.e., 110% of the cost of production of the excisable goods in terms of Cost Accounting Standard-4 (CAS-4). However, it is submitted that it is practically not possible to arrive at the cost of production of waste. Even, the CAS-4 method does not provide any mechanism to determine the cost of production of scrap generated during the manufacturing process and it only provides for determination of the cost of production of finished goods. It has been clearly stated t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that the Appellant is eligible to exemption under Notification No. 67/95-C.E., dated 16-3-1995 wherein the Central Government exempts the goods manufactured in a factory and used within the factory for production in or in relation to the final products, from the whole of duty of excise leviable thereon. It is submitted that the proviso to the said Notification provides that nothing contained in this notification shall apply to inputs used in or in relation to the manufacture of final products which are exempt from the whole of the duty of excise leviable thereon or are chargeable to nil rate of duty, other than those goods which are cleared by a manufacturer of dutiable of dutiable and exempted final products, after discharging the obligation prescribed in Rule 6 of Cenvat Credit Rules, 2001. (e) It is submitted that in the facts of the case, the Appellant are using the waste captively in the manufacture of exempted RPG which in turn is used in the manufacture of dutiable BOPP Film. This RPG which is exempt is also cleared for home consumption to independent buyers on payment of the appropriate amount under Rule 6 of Cenvat Credit Rules. It is submitted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is submitted that out of 9 show cause notices, in respect of 2 show cause notices, C.No. V(39)15/CE/17/Commr Adj/Jal/2005/2534-36, dated 30-6-2005 for the period July, 2000 to March, 2003 and C.No. V(30)15/CE/18/Commr Adj/Chd-II/5377-79, dated 8-3-2011 for the period February, 2006 to December, 2010, the department has invoked the extended period by alleging suppression of fact with intent to evade payment of duty. As already stated, it is a settled principle of law that in a Revenue Neutral situation, where the credit of excise duty paid on the waste captively consumed is available to the Appellant, the question of suppression of fact with intent to evade payment of duty does not at all arise. For this preposition, the Appellant would like to rely on the Final Order No. A/57552/2013-EX(DB), dated 29-8-2013 passed by this Hon ble Tribunal in their own case in Appeal No. 2104 of 2005-EX(BR). Where a show cause notice already issued for the normal period, the department cannot allege suppression of fact in the following show cause notices for subsequent periods. (h) It is also a settled principle of law that where a show cause notice has been issued for the n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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