2015 (1) TMI 985 - AT - Central Excise

Tribunal overturns duty demand decision, criticizes authority for lack of verification. Appeals allowed for further consideration.

HYVA INDIA PVT. LTD. Versus COMMISSIONER OF CENTRAL EXCISE, BELAPUR

The Tribunal set aside the adjudicating authority's decision confirming duty demand against the appellant for the period October 2003 to March 2007. The ... Valuation of goods - whether the cost of transportation + transit insurance have been included in the assessable value of the chassis fitted with engine supplied by Tata Motors - Held that:- Instead of doing the necessary verification, the adjudicating authority has unnecessarily proceeded to adjudicate the matter without verifying the facts and expecting that it is the Tribunal’s job to verify these facts and not that of the adjudicating authority. We strongly condemn this approach of the adjudicating authority. When a certificate is produced duly certified by the Chartered Accountant, it was the responsibility of the adjudicating authority to consider and accept the same. If he had any doubt about the voracity of the certificate, then he could have got the same verified through the jurisdictional excise authorities at Jamshedpur, which has not been done in the instant case. Therefore, we set aside the impugned order and remand the matter back to the adjudicating authority to conduct necessary verification of the claim of the appellant that the cost of transportation and transit insurance has already been included by M/s Tata Motors in respect of chassis fitted with engine supplied to the appellant. - Decided in favour of assessee. Issues:- Duty demand confirmation against the appellant for the period October 2003 to March 2007.- Whether the cost of transportation and transit insurance charges have been included in the assessable value of chassis fitted with engines supplied by Tata Motors.- Adjudicating authority's acceptance of appellant's contention regarding the inclusion of costs.- Verification of facts by the department and responsibility of the adjudicating authority.- Setting aside the impugned order and remanding the matter for necessary verification.Analysis:1. Duty Demand Confirmation: The appellant filed appeals against the duty demand confirmed by the adjudicating authority for the period from October 2003 to March 2007. The duty demand was based on the ground that certain costs, including transportation and transit insurance charges, were not included in the assessable value of 'chassis fitted with engines' supplied by Tata Motors for body building to the appellant.2. Inclusion of Transportation and Insurance Charges: The appellant contended that the costs of transportation and transit insurance were indeed included in the assessable value of the goods supplied by Tata Motors. They provided evidence in the form of an affidavit, Chartered Accountant's certificate, and email correspondence to support their claim. Despite the submission of these documents, the adjudicating authority proceeded to confirm the duty demand, stating that such costs cannot be excluded from the assessable value.3. Verification and Responsibility of Adjudicating Authority: The Tribunal criticized the adjudicating authority for not conducting necessary verification of the appellant's claim regarding the inclusion of transportation and insurance charges in the assessable value. It was noted that the authority should have verified the facts, especially when presented with a Chartered Accountant's certificate. The responsibility to verify such claims lies with the adjudicating authority, and in this case, the necessary verification through jurisdictional excise authorities at Jamshedpur was not carried out.4. Setting Aside the Impugned Order: Considering the narrow issue at hand and the lack of verification by the adjudicating authority, the Tribunal set aside the impugned order and remanded the matter back for conducting the essential verification. The Tribunal emphasized that when a certificate duly certified by a Chartered Accountant is presented, it is the responsibility of the adjudicating authority to consider and accept it, or conduct further verification if doubts arise.5. Conclusion: The appeals were allowed by way of remand, keeping all issues open for further consideration. Stay petitions were also disposed of, and a copy of the order was to be forwarded to the concerned Chief Commissioner of Central Excise for necessary instructions to avoid frivolous litigation in the future.