2023 (4) TMI 210 - AT - Central Excise

Excise duty on depot clearance should match depot sale value. Time-barred notice deemed invalid. Compliance saves the day.

Jmd Oils Pvt Ltd Versus C.C.E. & S.T. -Rajkot

The Tribunal held that in cases of depot clearance, excise duty should be charged based on the transaction value prevailing at the depot at the time of ... Refund in respect of the captioned clearances - Area based exemption - case of the department is that in case of depot clearance the price at which the goods are actually sold the duty is payable on such transaction value charged from depot in terms of Rule 7 of Central Excise Valuation Rules, 2000 - extended period of limitation - HELD THAT:- The dispute about valuation of the excisable goods, the appellant have not contested strongly. Moreover, we also find that there is no dispute that in case of sale through depot, the transaction value prevailing at depot at the time of sale of goods shall be the transaction value for charging excise duty in terms of Section 4 of Central Excise Act, 1944. Therefore, on merit the demand is sustainable. However, the appellant have made out strong case on limitation. The appellant though working under the self-removal procedure, but they were working under Notification No.39/2001-CE. As per the said notification, the appellant had been filing their refund claim regularly in respect of all the clearances made from their factory. It is very obvious that the department before sanctioning the refund claim was under taking scrutiny of all the records such as duty paying invoice, payment through CENVAT, Payment through PLA, etc., Therefore, it can be conveniently construed that there was no suppression of fact on the part of the appellant. Extended period of limitation - HELD THAT:- In the present case since the appellant was admittedly entitled for the refund of duty demanded in the impugned order there cannot be any intention to evade payment of duty. In this circumstances, we are of the clear view that there is absolutely no mala fide intention to evade the payment of duty on the part of the appellant. Therefore, the demand for extended period is not sustainable. In the present case the SCN was issued on 09.03.2011 for covering the period of 2005-06 to April, 2009. Hence, the entire demand is time bar. The appeal is allowed on the ground of time bar. Issues involved:The issues involved in the judgment are the valuation of excisable goods in case of depot clearance and the applicability of the extended period for demanding duty.Valuation of Excisable Goods:The appellants were engaged in the manufacture of various excisable goods and availed area-based exemption under Notification No. 39/2001-CE. The Department contended that duty should be paid on the price at which the goods were actually sold from the depot, not the factory gate price. A Show Cause Notice was issued for demanding duty, interest, and penalty. The appellant argued that there was no intention to evade payment of duty as they regularly filed refund claims under the notification and the duty demanded was refundable. The Tribunal found that in case of sale through depot, the transaction value prevailing at the depot at the time of sale shall be the transaction value for charging excise duty. While the demand was found to be sustainable on merit, the Tribunal held that there was no mala fide intention to evade payment of duty, as the appellant was entitled to a refund, making the situation revenue neutral. Therefore, the demand for the extended period was deemed not sustainable.Applicability of Extended Period:The Tribunal noted that the Show Cause Notice was issued on 09.03.2011, covering the period from 2005-06 to April 2009. The appellant argued that the demand was time-barred as they were working under Notification No. 39/2001-CE and regularly filed refund claims. The Tribunal agreed with the appellant, stating that there was no suppression of fact and no intention to evade payment of duty. As the duty demanded was also refundable, and there was no revenue loss to the Government, the Tribunal found that the demand for the extended period was not sustainable. Consequently, the impugned order was set aside, and the appeal was allowed on the ground of being time-barred.Separate Judgment by Judges:The judgment was pronounced by Mr. Ramesh Nair, Member (Judicial) and Mr. Raju, Member (Technical) on 03.04.2023.