9911796707
TMI Blog2024 (6) TMI 1460X X X X Extracts X X X X X X X X Extracts X X X X ..... t the waste/ scrap captively consumed in the manufacture of PP Granules, the valuation was not properly done as the same should have been done in accordance with CAS-4 standards prepared by Institute of Cost and Works Accountants of India (ICWAI). It was also observed that as per Rule 8 of Central Excise (Determination of Price of Excisable Goods), 2000 when the goods are not sold by the assessee but are used for consumption by him or on his behalf in the production or manufacture of such other articles, the value shall be 110% of the cost of production or manufacture of such goods. Thus, the valuation of such scrap is wrongly adopted by the Appellant and it is in accordance with the Provision of Section 4 of Central Excise Act, 1944. Accordingly, the periodical show cause notices were issued. Those show cause notices have been adjudicated wherein the difference of duty demand was confirmed. Being aggrieved by the orders-in-original, the appellant filed appeal before the Commissioner (Appeals) which were rejected, hence the present appeals. 2. Shri Ambarish Pandey, learned counsel appearing on behalf of the appellant, at the outset, submits that the issue is no longer res-integra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er should be applied in the case of captive consumption. 8. The Learned Counsel vehemently argued that the nature of the scrap whether it is different for captive consumption and for independent sale was not the subject matter of the Show Cause Notice and therefore, the said issue should not have been taken in the Adjudication Order. 9. We find that in the Show Cause Notice the fact was narrated which is reproduced below....... "In the present case, the assessee uses waste/scrap generated at intermediate stage for captive consumption in the manufacture of PP granules which are exempted from payment of duty under Notification No. 6/2002-CE dated 01.03.2002 or 4/2006-CE dated 01.03.2006. It appears that the exemption under notification number 67/95-CE, therefore, is not available to such quantity of waste/scrap captively consumed. The assessee are, therefore, paying duty at applicable rates on such waste/scrap. However, the value of such captively consumed waste/scrap is worked out by them at the price at which such goods are sold by them to independent buyers. Whereas it appears that in the case of captive consumption, the valuation of the goods captively consumed is required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2260 15 7 3143/26.02.2004 waste - scrap of plastic Captive waste to RPG for rpg sale to ext customer 4000 16.5 8 3072/16.02.2004 End waste - Transparent sale to customers not applicable 1040 21 End waste - White not applicable 265 8.25 End waste White not applicable 2860 17 9 418/30.5.2004 Waste and Scrap of Plastic Captive waste to RPG for rpg sale to ext customer 2700 19.8 10 478/5.6.2004 End waste - White sale to customers not applicable 3880 24 11 1867/1.12.2004 waste - scrap of plastic Captive waste to RPG for rpg sale to ext customer 2800 41.8 12 1915/8.12.2004 End waste White sale to customers not applicable 2030 29 13 1981/17.12.2004 waste - scrap of plastic Captive waste to RPG for rpg sale to ext customer 3600 30.53 14 1984/17.12.2004 End waste - White sale to customers not applicable 4920 27.75 12. On going through the above chart we find that there is no specific character of the waste and scrap mentioned in the description, either in case of captive consumption or in the case of waste and scrap sold to independent customer. Therefore, merely on the description which does not give the actual character of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies to a particular factory, which is why different units belonging to one company are separately registered and separately assessed to duty. Since the assessee in the present case is the Dolvi plant and it is not the revenue's case that the other three units of the company to whom HR coils were transferred were undertaking further manufacturing operations on behalf of the Dolvi Unit, the provisions of Rule 8 will not apply. We, therefore, hold that Rule 8 is inapplicable in the instant case. 6. We also note that in the present case the application of Rule 4 is being disputed by the Revenue not on the ground that the said rule is inapplicable to the present case but on the ground that a more specific provision in Rule 8 is available to enable determination of the assessable value. As discussed above, the provisions of Rule 8, in our view, are not applicable to the present case and therefore the value determined by the assessee under Rule 4 deserves acceptance. 7. We also agree with the submission of the assessee that even if both the rules, i.e. Rule 4 and Rule 8, were applicable, it would only be logical to read and apply the various rules in the Central Excise Valuation Rules ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey occur first in the sequential order of the Valuation Rules but also for the reason that in a case where both the rules are applicable, the application of Rule 4 will lead to a determination of a value which will be more consistent and in accordance with the parent statutory provisions of Section 4 of the Central Excise Act, 1944. 10. The papers are now returned to the referral Bench for passing orders on the appeal." 13. From the above decision of the Larger Bench of this tribunal, the same is clearly applicable in the facts of the present case. Therefore, on merit itself the demand is not sustainable. We also examined the aspect of limitation, we find that the fact of sale of waste and scrap and captive consumption for further manufacture of reprocessed granules and use thereof in the manufacture of BOPP films was in the knowledge of the department as the appellant was otherwise discharging the duty and the issue is of neat question of law that what should be the valuation in case of captive consumption. Subsequently, since the issue was contentious on the dispute of valuation in case of captive consumption the same was resolved by the Larger Bench of this tribunal in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
