TMI Blog2022 (9) TMI 1459X X X X Extracts X X X X X X X X Extracts X X X X ..... yment on the ground of unjust enrichment. Both authorities also hold that the assessments were provisional. Appellants have while filing the ER-1 return disclosed all the facts and have also submitted the CAS-4 certificate also. The department was aware of the valuation practices adopted by the Appellants. All the material facts relating to the manufacture, clearance and valuation of the cables used in the captive consumption were always within the knowledge of the department. The ER-1 returns also show that there was interplant transfer - appellants have not violated any provisions of the Central Excise Act or the rules made thereunder. Thus even if there was any short payment of duty the same was on the basis of the CAS-4 certificate issue by the independent Cost Accountant, was due to bonafide belief of the Appellants regarding determination of assessable value, cannot be on account of suppression, fraud misstatement or contravention of the rule with the intention to evade payment of duty leading to invocation of extended period of limitation as per the proviso to Section 11A (1) of the Central Excise Act,1944. Demand do not sustain - demand for interest and penalties impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ables falling under Chapter No.85 of the First Schedule to the Central Excise Tariff Act, 1985. The appellants are availing the credit of duty paid on inputs and capital goods and credit of service tax paid on the input services, under the Cenvat Credit Rules, 2004. 2.2 During the course of Audit on appellant's records, it was observed that the appellants were clearing intermediate products to their own units for use in the manufacture of other excisable goods. At the time of such clearances, the appellants paid duty on the basis of CAS 4 value + 10% of cost of production. On perusal of Note(2) of the monthly CAS-4 certificates for the year 2006-07, it was observed that Other Cost Elements were worked out on the basis of Audited Cost records for the year 2004-05. The monthly calculation of cost of production for the year 2006-07, therefore, does not reflect the actual cost of production or manufacture. Therefore, the self assessment by the appellants, in respect of goods cleared during 2006-07, is necessarily on provisional basis. On perusal of the Final CAS-4 for the Financial year 2006-07, submitted by the appellants, it was observed that the appellants have undervalued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... EB/C-II dated 30.01.12 set aside the order of Commissioner (Appeals) and remanded the appeal back to Commissioner (Appeals) inter alia directing to decide the appeal on merits without insisting on any further deposit 2.7 In remand proceedings Commissioner (Appeals) has decided the matter by the impugned order. Aggrieved the appellants have filed this appeal. 3.1 We have heard Shri Rajesh Ostwal with Shri Saurabh Bhise, Advocates for the appellants and Shri Deepak Bhilegaonkar, Additional Commissioner, Authorized Representative for the revenue 3.2 Arguing for the appellants learned counsel submits: Case of the department is that the valuation of goods was done on the basis of monthly CAS-4 which is prepared on the basis of previous year's / previous month's figures. As per the Show Cause Notice, assessment done by the Appellants on the basis of monthly CAS-4 was provisional. Monthly CAS-4 is correct and gives more accurate cost of the production. The cost of production was arrived based on previous year's cost of production. There is no provision in law which states that cost of production has to be calculated for the financial year as a block of period an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 222 - MADHYA PRADESH HIGH COURT Without prejudice to above, it is submitted that assessment cannot be provisional only in cases where cost of production was more than original value. For parity's sake, the assessment of goods involving excess payment of duty where cost of production was less than original value must also be considered as provisional. While finalizing provisional assessment, adjustment of excess duty towards short payment on clearances is permissible and must be allowed. o Toyota Kirloskar Auto Parts Pvt. Ltd. [2012 (276) ELT 332 (Kar.)] o Jonas Woodhead Sons (I) Ltd. [2015 (329) ELT 577 (T.)] o Mercedes-Benz (I) Pvt. Ltd. [2017 (347) ELT 646 (T.)] Invocation of extended period of limitation is incorrect. 15.1 The Appellants have provided all necessary details to the department and they have not suppressed any facts especially with intent to evade payment of duty. Entire demand for the period April 2005 to March 2007 is beyond the period of limitation. 15.2 Entire exercise is revenue neutral inasmuch as the sister units of the Appellants are eligible to take credit of differential duty, if any, payable by the Appellants. Hon'ble Supre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tation o Hindustan Copper Ltd. [2005 (191) E.L.T. 665 (Tri. - Del.)] o Hindustan Zinc Ltd. [2012 (276) E.L.T. 393 (Tri. - Del.)] o Hero Honda Motors Limited [2011 (273) E.L.T. 89 (Tri. - Del.)] o Versus Baba Asia Ltd. [2011 (267) E.L.T. 115 (Tri. - Del.)] o Star Industries [2015 (324) E.L.T. 656 (S.C.)] o Maharshi Alloys Pvt ltd [2020-TIOL-494-CESTATHYD] o Dilip Kumar Co. o Mahindra and Mahindra Ltd [2018-TIOL-2061 - CESTAT-MUM] o Gestamp Automotive India Pvt Ltd [2017 (7) G.S.T.L. 337 (Tri. - Mumbai)] In Vidyut Metallics Ltd. [2015 (11) TMI 91 -CESTAT MUMBAI] and in the case of Dhariwal Industries Ltd. [2019 (21) G.S.T.L. 461 (Tri. - Mumbai)] held that under Rule 8 cost of production can be ascertained only on the basis of CAS-4 certificate. In the instant case no CAS-4 certificate is furnished till date as held in OIO. In the case of Gujarat State Fertilizers Chemicals Ltd. [2007 (218) E.L.T. 238 (Tri. - Ahmd.)] held that in case of clearance of goods on inter-unit transfer basis on payment of duty after adopting value based on previous year data, and when differential duty was paid based on CAS-4 after being pointed out by Audit, the conditio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ltation with Institute of Cost and Works Accountants in India - In instant case, valuation not done in terms of CAS-4 standard but on monthly basis, matter remanded to original authority to decide assessable value in terms of CAS 4 - Section 4 of Central Excise Act, 1944' 10.2. I find that appellants have erred in assessment of the goods cleared for captive consumption during the F.Y.2005-06 and 2006-07. The learned adjudicating interalia has rightly held that appellants should have assessed these goods in accordance with the provisions of Sec.4(1)(b) of the Central Excise Act, 1944 read with Rule 8 of the Valuation Rules, 2000, since the correct cost of production was not available. In spite of being aware of the fact that it was not possible to arrive at the correct assessable value of the goods cleared for captive consumption during the period 2005-06 2006-07, appellants, instead of resorting to provisional assessment, they have for some reasons, adopted their own method of assessment based on monthly CAS-4, which is incorrect under the law. In my view these acts of omission and commission of appellants is enough to establish the intent and ground enough to demand the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... citations are not relevant to the current appeal. On the contrary, there is a catena of judgments wherein higher appellate forums have interpreted the law and have held that the question of revenue neutrality does not arise in such situations. Some such judgments are enlisted here under: Hindustan Zinc Ltd. V/S Commissioner of Central Excise, Jaipur 1 [2012(276)E.L.T.393 (Tri.Del.)] Hon'ble tribunal in this case as held that subsequent payment of amount short paid cannot ipso facto result in revenue neutrality, merely because the appellants are entitled to avail credit in respect of duty paid - Right to claim arises only after payment of duty and not prior thereto - Merely because assessee paid duty subsequent to the date even though the appellants are entitled for credit for such payment of duty that does not result in revenue neutrality Hero Honda Motors Ltd. V/s Commissioner of C. Excise, Meerut-I [2011(273) E. L.T. Del. Tri.)]. Tribunal in this case has held that Revenue neutrality can arise only in case of discharge of liability in one manner or other within the prescribed period within which the duty was payable. In case of delay in payment of duty, obviously, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Mafatlal Industries [1997 (89) ELT 247 (SC)] para 95, reproduced below: 95.Rule 9B provides for provisional assessment in situations specified in Clauses (a), (b) and (c) of sub-rule (1). The goods provisionally assessed under sub-rule (1) may be cleared for home consumption or export in the same manner as the goods which are finally assessed. Sub-rule (5) provides that when the duty leviable on the goods is asssessed finally in accordance with the provisions of these Rules, the duty provisionally assessed shall be adjusted against the duty finally assessed, and if the duty provisionally assessed falls short of or is in excess of the duty finally assessed, the assessee shall pay the deficiency or be entitled to a refund, as the case may be . Any recoveries or refunds consequent upon the adjustment under sub-rule (5) of Rule 9B will not be governed by Section 11A or Section 11B, as the case may be. However, if the final orders passed under subrule (5) are appealed against - or questioned in a writ petition or suit, as the case may be, assuming that such a writ or suit is entertained and is allowed/decreed - then any refund claim arising as a consequence of the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X
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