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TMI Blog2021 (9) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... the Central Excise Act, 1944 pertaining to the period March 2011 to October 2015. 2. Briefly stated, the facts of the case are that the appellant is a PSU and a 100% subsidiary company of Coal India Limited. The appellant is engaged in the business of mining and selling of coal. It has several units, commonly referred as "area offices" which got separately registered under Central Excise Act when coal became excisable w. e. f. 1st March 2011 as there was no centralized registration at that point of time. Representations were made to the departmental authorities and the CBEC to allow Centralized Registration considering the various difficulties arising due to separate registrations for each unit/area. Effective from November 2015, the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liability of excise as per Rule 8 of the Central Excise Valuation (Determination of Price) Rules 2000. 3. The Ld. Advocate appearing for the appellant assessee submitted that there are no "persons" but only one person i.e. Bharat Coking Coal Limited (BCCL), the appellant herein. The different Areas/Units which were separately registered are under one single legal entity i.e. BCCL. Therefore, no related person exists in the transaction between the separately registered Areas/units of the same legal entity and consequently Section 4(3)(b)(iv) of the Act is not applicable at all. To support his contentions, he relied on the Tribunal's decision in the case of India United Mills v Commissioner of Central Excise, Mumbai- 2017 (5) G.S.T.L. 430 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that washing of coal does not amount to production or manufacture. He also relied on the decision of the Tribunal in Aryan Energy (P) Ltd v Commr.of Cus & C.Ex, Hyderabad-1, 2009 (13) STR 42 (Tri-Bang) to submit that washing of coal (also known as beneficiation of coal) does not amount to production of coal as washing is a process which enhances the quality of coal. On the basis of above submissions, he further submitted that Rule 8 is not applicable in their case inasmuch as raw coal is neither used captively by the appellant nor it is otherwise consumed on his behalf and that washing of coal does not amount to production or manufacture of other articles. 5. The Ld. Advocate also strongly contested the demand on revenue neutrality. He su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ri-Mumbai), civil appeal against which has been dismissed by Supreme Court 2019 (368) ELT A41 (SC). The Tribunal in that case decided the issue of differential duty demand arising out of valuation on clearances to sister unit on the principle of revenue neutrality. In that case, the Tribunal set aside the demand solely on the principle of revenue neutrality without visiting the issue on valuation:- * CCE, C & ST v. Tarapur Grease India Pvt. Ltd. [2016 (334) E.L.T. 416 (Bom.)] * CCE v. Special Steel Ltd. [2015 (329) E.L.T. 449 (Tri.)] * CCE & C v. Indeos ABS Ltd. [2010 (254) E.L.T. 628 (Guj.)] * STI Industries v. CCE [2015 (327) E.L.T. 514 (Tri.)] He also relied on the following decisions to support his case on revenue neutrality to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accordingly prayed that the appeal filed by the assessee be rejected being devoid of any merit. 7. Heard both sides through video conferencing and perused the appeal records. 8. We find that the issue to be decided is whether Rule 8 is applicable on raw coal transferred by the appellant's coal producing unit, namely, WJ Area to its washery unit and whether both the transferor and the transferee units owned by the same legal entity i.e. BCCL, the appellant, are related persons. We find that the dispute with regard to valuation is only for the period upto October 2015, i.e. during the period when the units were separately registered with jurisdictional excise authorities. The question of valuation in the centralised excise registration reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provision may or may not apply, we cannot address to the same. Otherwise, we have to travel beyond the scope of show-cause notice, which is not permissible in the law." 9. We also find that the entire case of the Revenue is based on the observation that the two different units of the appellant are related persons but the relevant Rule 9 has not been invoked. On perusal of the allegations made in Para 4, Para 5 and Para 10 of the impugned SCN, we agree with the submissions of the Ld. Advocate for the appellant that since the entire foundation of the show cause notice is based on the wrong notion that the washery is a "related person" of the appellant, the entire demand is liable to be quashed. Further the invocation of Rule 8 of the Valuat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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