TMI Blog2005 (10) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... sions, has been settled by two decisions of the Larger Bench of the Hon'ble Tribunal in the case of American Auto Ltd. v. CCE [ 1995 (6) TMI 33 - CEGAT, MADRAS-LB] and subsequently in the case of ABB v. CCE. The said decisions of the Larger Bench has in fact been followed for the period in dispute in the case of Eicher Tractors Ltd. v. CCE [ 2004 (5) TMI 442 - CESTAT, NEW DELHI] . Appellant thus submits that the view adopted by them is the same as that of the Larger Bench of the Hon'ble Tribunal. Assuming for the sake of argument, even if a contrary view is taken today, in such a circumstances, the larger period of limitation cannot be sustained as has been held by the Hon'ble Supreme Court in the case of Mentha and Allied Products Ltd. v. CCE [ 2004 (5) TMI 74 - SUPREME COURT] and in the case of Jay Prakash Industries v. CCE [ 2002 (11) TMI 92 - SUPREME COURT] . We find no reason to disagree with this submission hold the bar of limitation in favour of the appellants. When duty demands cannot be confirmed, based on findings on merits of no sale taking place and on applications of the Board instruction on Valuation, when no sales on taking place, in law as also the amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said quantities were received from one suppliers viz KIOCL Mandovi Pellets, and Essar Steel Limited on barges which were unloaded at IIL's jetty at Dharamtar Port. This were carried to the IIL factory where they were stored separately bargewise so as to enable identification of the origin of each lot. Credit was availed by IIL of the duty paid on entire quantity procured. As and when required by IMIL, there share of such pellets were transferred through a conveyor from IIL's plant to IMIL premises under cover of invoice and on reversing an amount equal to the Cenvat credit availed on such inputs, so transferred. In addition to such invoices, IIL also was raising debit notes on IMIL for recovering on pro rata basis the actual expenditure incurred by it in relation to procuring such iron ore pellets, such as bank commission, interest, carriage inward etc. This division on pro rata basis was as per the joint procurement policy agreed upon. (iii) IIL was issued a show cause notice dated 29-9-2003 alleging that iron ore pellets was sold by IIL to IMIL and that amounts recovered by IIL in the form of Debit notes towards bank charges, interest, carriage inward, etc. were includib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame were includible in the assessable duty had been correctly computed in the notice by including the said additional consideration. (iv) That Rule 57AB of the erstwhile Central Excise Rules, 1944/Rule 3(4) of the Cenvat Credit Rules, 2001-2002 provided in unequivocal terms that where inputs on which credit has been availed, are cleared as such, the same is required to be treated as goods having been manufactured in the said factory. (v) Appellants' contention that there is no machinery provision for recovering the said amount was not sustainable, inasmuch as, the cenvat scheme, i.e. Rule 57AB/Rule 3(4) itself provided a mechanism for recovery of the said amount and that no separate machinery mechanism was required to recover the said amount. (vi) That the Rule 57AB/3(4) provided a deeming fiction equating the amount payable on clearances of such goods, as duty of excise, and consequently the credit availed on inputs, which were sold as such for higher price than the purchase price, were required to be reassessed and the act authorized and empowered recovery of duty under Section 11A in respect of such goods. (vii) Appellant submits that the demand by limitation is not acceptab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olved. It may be noticed that sub-rule (1C) of Rule 57AB of the erstwhile Central Excise Rules, 1944 and Rule 3(4) of the Cenvat Credit Rules, 2001 (now 2002), talk of determination of value for such goods and not the said goods . Thus, if the assessee partly sells the inputs to independent buyers and partly transfers to its sister units, the transaction value of such goods would be available in the form of the transaction value of inputs sold to an unrelated buyer (if the sale price to the unrelated buyer varies over a period of time, the value nearest to the time of removal should be adopted). Problems will, however, arise where the assessee does not sell the inputs/capital goods to any independent buyer and the only removal of such input/capital goods, outside the factory, is in the nature of transfer to a sister unit. In such a case proviso to Rule 9 will apply and provisions of Rule 8 of the valuation rules would have to be invoked. However, this would require determination of the 'cost of production or manufacture', which would not be possible since the said inputs/capital goods have been received by the assessee from outside and have not been produced or manufactured ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incurred up to the time and place of manufacture of the iron pellets, in this case, post-removal expenses cannot be brought in under the levy of the Section 3(1). The constitutional decision in the case of Bombay Tyre International [1983 (12) E.L.T. 869 (S.C.)], provides that. As costs up to factory gate that go into value up to the deny of removal. In our view, such post-removal expenses can never be added to determine value for duty recovery especially so under deemed fiction of law. Even Rule 57AB of the erstwhile Central Excise Rules, 1944/Rule 3(4) of Cenvat Credit Rules, 2001, which reads as follows: when inputs or capital goods, on which cenvat credit has been taken, are removed as such from the factory, the manufacture of final products, shall pay the amount equal to duty of excise which is leviable on such goods, at the rate applicable to such goods on the date of such removal and on the value determined for such goods under Section 4 or Section 4A of the Act, as the case may be, and such removal shall be made under cover of invoice referred in Rule 7 (emphasis supplied). Does not provide for reassessment of value of inputs cleared as such. The rules only provides for re- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... io of the decision of the Hon'ble Madras High Court in the case of Eternt Everest v. Union of India - 1997 (89) E.L.T. 28 (Mad.) and Tribunal in the case of Jindal Vijayanagar Steel Ltd. v. CCE - 2003 (157) E.L.T. 414, Wheel and Axle Plant v. CCE - 2003 (161) E.L.T. 843. (f) We also find that the appellants have a good case on limitation to set aside the demands as there could not be an intention to avail payment of duty as both units were paying duty through PLA were under Modvat chain. The question as to whether reversal of credit at the time of clearance on inputs as such, is sufficient compliance with the legal provisions, has been settled by two decisions of the Larger Bench of the Hon'ble Tribunal in the case of American Auto Ltd. v. CCE - 1996 (81) E.L.T. 71 (Tri. - LB) and subsequently in the case of ABB v. CCE. The said decisions of the Larger Bench has in fact been followed for the period in dispute in the case of Eicher Tractors Ltd. v. CCE - 2004 (175) E.L.T. 277. Appellant thus submits that the view adopted by them is the same as that of the Larger Bench of the Hon'ble Tribunal. Assuming for the sake of argument, even if a contrary view is taken today, in s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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