2024 (1) TMI 933 - AT - Central Excise

Tribunal Affirms Limitation on Duty Demand, Dismisses Revenue's Appeal, Citing Compliance with Valuation Rules.

The Tribunal upheld the Commissioner's decision to restrict the demand for differential duty to the normal period of limitation, dismissing the Revenue's ... Method of valuation - Clearance of clinker and cement in bulk to their sister unit - valued under Section 4 of the Central Excise Act, 1944 read with the Central Excise Valuation Rules, 2000 or under Rule 8 of the Central Excise Valuation Rules, 2000? - HELD THAT:- This Tribunal in similar circumstances, involving the same items namely clinkers and bulk cements in M/S. ULTRATECH CEMENT LTD., (UNIT: RAJASHREE CEMENT WORKS) , VERSUS COMMISSIONER OF CENTRAL EXCISE AND CUSTOMS, [2024 (1) TMI 663 - CESTAT BANGALORE] even though upheld the method of assessment to be under Rule 4 read with Rule 11 of the Central Excise Valuation Rules, 2000 but following the principle laid down in the below mentioned case restricted the demand to normal period of limitation. The demand has been rightly restricted to normal period of limitation as held by the ld. Commissioner in the impugned order. Consequently, the impugned order is upheld and the Revenue’s appeal being devoid of merit is dismissed. Issues Involved: The appeal filed by the Revenue against the Order-in-Original passed by the Commissioner of Central Excise, Belgaum regarding the assessment procedure of goods cleared to a sister unit under the Central Excise Act, 1944 and Central Excise Valuation Rules, 2000.Assessment Procedure and Demand Notice: The respondent, engaged in manufacturing cement and clinker, cleared goods to their sister unit under Rule 8 of the Central Excise Valuation Rules, 2000. A demand notice was issued for recovery of differential duty, alleging contravention of Section 4 of the Central Excise Act, 1944. The Commissioner limited the demand to the normal period of limitation and dropped the penal proceedings, leading to the Revenue's appeal.Revenue's Argument and Tribunal's Analysis: The Revenue contended that the correct assessable value was not determined by the respondent for the goods cleared to their sister unit. The Tribunal noted that the respondent had been discharging duty under Rule 8 of the Valuation Rules, filing ER-1 Returns periodically. The Commissioner confirmed the demand for a specific period, considering the facts and evidence on record, and the Tribunal upheld this decision based on previous judgments involving similar circumstances.Precedents and Limitation Period: Citing a previous case involving UltraTech Cement Ltd, the Tribunal emphasized the importance of the limitation period in demanding duty. The Tribunal referred to a judgment by the Gujarat High Court, which clarified the valuation requirements for captive consumption of goods and transfers to sister concerns. Based on these precedents, the Tribunal concluded that the extended period of limitation could not be invoked in the present case, affirming the decision to restrict the demand to the normal limitation period.Conclusion: In line with the established principles and precedents, the Tribunal upheld the Commissioner's decision to limit the demand to the normal period of limitation. Consequently, the Revenue's appeal was dismissed as lacking merit.Separate Judgment: No separate judgment was delivered by the judges in this case.