2017 (12) TMI 890 - AT - Central Excise

Tribunal remands case for fresh adjudication after finding excessive penalty imposed.

The Tribunal remanded the case to the adjudicating authority for fresh adjudication, allowing both the assessee and the department to present their ... Concessional rate of duty - cement - capacity based production - Board circular dt. 28.2.2002 - It appeared to the department that assessee was not eligible for benefit of exemption notification as their installed capacity was not reduced - Department also held a view that assessee could not avail benefit under Notification 4/2006 for cement manufactured and cleared under the brand ARASU; that being a non-mini cement plant. Held that: - Both in the assessee's appeals and department's appeals, grievances have been put forth concerning the eligibility of concessional rates of duty to various clearances effected by the assessee and also manner of calculation of the net duty liability - The assessee in particular, is aggrieved that adjudicating authority while calculating the duty liability has taken the cumulative total of duty liability calculated at ₹ 400/- per MT and also had calculated at 14% advalorem - The department has also put forth its grievance that the impugned order has wrongly extended concessional rate of duty notwithstanding clear guidelines of the Board vide circular dt. 28.2.2002; that duty concession has been wrongly extended in respect of clearances of cement in package form to industrial / institutional buyers and in respect of cement packed only in 50 kg bags. Ends of justice would be best served by remanding the matter to the adjudicating authority to cause fresh de novo adjudication - In such de novo proceedings, adjudicating authority will take into account the contentions of the both assessee as well as department - appeal allowed by way of remand. Issues:1. Eligibility of the assessee for the benefit of exemption notification due to a reduction in installed capacity.2. Applicability of concessional rates of duty for cement manufactured under the brand name 'ARASU'.3. Duty liability for cement manufactured from bought out clinkers and cleared to related buyers.4. Correct valuation of cement cleared to industrial/institutional consumers in 50 kg bags.5. Calculation of duty liability and imposition of penalty.Issue 1:The adjudicating authority concluded that the assessee, a mini-cement plant, was eligible for the benefit of Notification No. 04/2006 as they had reduced their installed capacity. However, the department contended that the assessee could not avail the benefit for cement manufactured and cleared under the brand 'ARASU'. Two show cause notices were issued proposing a demand of Central Excise duty, which were adjudicated in favor of the department.Issue 2:The department argued that the use of the brand name 'ARASU' did not entitle the assessee to claim concession under Notification No. 04/2006 as the brand name belonged to the Tamilnadu Government. The adjudicating authority disagreed and allowed the concession for the brand name owned by the assessee. However, for cement manufactured from clinkers procured from outside, the concession was not applicable.Issue 3:The department proposed a duty liability for cement cleared to related buyers, which was higher than the concessional rate. The adjudicating authority confirmed a reduced demand of duty along with interest and penalty based on the valuation rules.Issue 4:Regarding the valuation of cement cleared in 50 kg bags to industrial/institutional consumers, the department argued that the concessional rate of duty was not applicable as the retail sale price was required to be declared on the packages. The department contended that duty was payable at the tariff rate for such clearances.Issue 5:The assessee challenged the calculation of duty liability, arguing that the Commissioner had demanded excess duty. The penalty imposed on the appellant was deemed harsh, considering the absence of intention to evade duty. The appellant also highlighted the cost of production and valuation methods to support their case.In the final judgment, the Tribunal remanded the matter to the adjudicating authority for fresh adjudication, considering the contentions of both the assessee and the department. Both parties were granted the opportunity to present their case and submit additional evidence during the fresh proceedings.