2019 (6) TMI 834 - AT - Central Excise

CESTAT ALLAHABAD: Ruling on Central Excise Act valuation rules clarifies excise duty liabilities

M/s Birla Corporation Ltd. Versus Commissioner of Central Excise Allahabad

The Appellate Tribunal CESTAT ALLAHABAD set aside the demand of &8377; 87,474 against the appellant under Section 4 of the Central Excise Act, 1944, ... Valuation - ‘Cement’ manufactured by the appellant and utilized within the factory of manufacturer - to be valued under Rule 8 of Central Excise (Valuation) Rules, 2000 or Section 4 of Central Excise Act, 1944? - HELD THAT:- The goods were not sold and the only rule that is applicable to the goods which are not sold in Rule 8 of said Valuation Rules - appeal allowed - decided in favor of appellant. Issues:Confirmation of demand under Section 4 of Central Excise Act, 1944 based on valuation rules.Analysis:The judgment by the Appellate Tribunal CESTAT ALLAHABAD involved the confirmation of a demand of &8377; 87,474 against the appellant under Section 4 of the Central Excise Act, 1944. The dispute arose regarding the valuation of goods 'Cement' manufactured by the appellant and utilized within their factory. The appellant contended that they paid excise duty based on the cost of manufacture as per Rule 8 of the Central Excise (Valuation) Rules, 2000. On the other hand, the revenue argued that the duty should have been paid based on the prices adopted for clearance of goods to institutional buyers. The Tribunal noted that the goods were not sold, and the applicable rule for goods not sold is Rule 8 of the Valuation Rules. Thus, the Tribunal found the revenue's stand to be incorrect and held that the impugned order was not sustainable.The Tribunal's decision to set aside the impugned order and allow the appeal was based on the interpretation of the relevant valuation rules and the specific circumstances of the case. The Tribunal emphasized that since the goods in question were not sold, the valuation for excise duty purposes should be determined in accordance with Rule 8 of the Valuation Rules. This ruling highlights the importance of correctly applying the valuation rules based on the specific facts and circumstances of each case to determine the appropriate excise duty liability.In conclusion, the judgment provides clarity on the valuation of goods for excise duty purposes when the goods are not sold, emphasizing the importance of following the relevant valuation rules. The decision by the Appellate Tribunal CESTAT ALLAHABAD serves as a precedent for cases involving similar disputes over the valuation of goods under the Central Excise Act, 1944, and underscores the significance of accurately applying the statutory provisions to determine excise duty liabilities.