2014 (9) TMI 187

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.... in Section 35G of the Central Excise Act, 1944 (hereinafter referred to as "the Act) for our consideration :- "(1)  Whether in the facts and circumstances of the case, the Tribunal was correct in setting aside the demand of duty prior to the period of one year from the date of issuance of show cause notice dated 9-11-2009 as being hit by limitation? (2)     Whether in the facts and circumstances of the case, the Tribunal was justifiable in holding the differential duty demanded and confirmed by CCE, Bhavnagar, as an adjudicating authority, on clearances made from NCMU unit without jurisdiction vide Order-in-Original Nos. 1 to 4/BVR/Commissioner/2011, dated 22-3-2011, Order-in-Original No. 39/BVR/Commissioner/2011....

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....emsp;We have heard learned counsel Mr. Y.N. Ravani for the Revenue and learned counsel Mr. Anand Nainawati for the respondent assessee who have fervently supported the rival claims of respective parties. The short question of controversy would be whether the appellant can be subjected to the rigors of extended period of limitation because of undervaluation of alleged clearance to their units, terming the same as deliberate act of undervaluation when in fact the appellant followed the circular of the department, which otherwise is binding to the department, itself. 8. At the outset, Circular No. 643/34/2002-CX., dated 1-7-2002 is to be referred to and relevant portion of the same requires to be reproduced hereunder :- Sl. No. Point o....

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....of the captive consumption in one's own factory, the valuation would be done as per Rule 8 of the Valuation Rules. It should mean that the assessable value of the goods to be assumed at 115% of the cost of production of the goods. And, if the same goods are partly sold by the assessee and partly consumed captively, the goods sold would be assessed on the basis of transaction value. 11. Details of Section 4, which speaks of the transaction value after substitution by Section 94 of the Finance Act, 2000, has come into effect from 1-7-2000, which runs as follows :- "4. (1) Where under this Act, the duty of excise is chargeable on any excisable goods with reference to their value, then, on each removal of the goods, such value shall....

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....the following terms : (a)     The provisions of Rule 8 of the Valuation Rules will not apply in a case where some part of the production is cleared to independent buyers; (b)     the provisions of Rule 4 are in any case to be preferred over the provisions of Rule 8 not only for the reason that they occur first in the sequential order of the Valuation Rules but also for the reasons that in a case where both the rules are applicable, the application of Rule 4 will lead to a determination of a value which will be more consistent and in accordance with the parent statutory provisions of Section 4 of the Central Excise Act, 1944." 14. It could be noticed from the material on the record that the Lar....

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....lcutta v. Indian Oil Corporation Ltd. reported in 2004 (165) E.L.T. 257 (S.C.) held that although a circular is not binding on a Court or on an assessee, Revenue cannot raise contention contrary to binding circular by Board and till the circular remains in operation, Revenue is bound by it and cannot be allowed to plea that it is not valid nor that it is contrary to the terms of statute. So as not to burden this order other decisions on the very point are not discussed. 18. In the case of Coaltar Chemicals Manufacturing Co. v. Union of India reported in 2003 (158) E.L.T. 402 (S.C.), the Apex Court has held that the manufacturer or the producer whenever is to be saddled with any liability, the question that would arise is as to whether....