TaxTMI 
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2016 (4) TMI 233
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.... merged with M/s. Sesa Sterlite Limited and it was approved by the Honble High Court of Goa and Madras and submitted the Certificate of incorporation dated 18.09.2013 issued by ROC, Goa. Subsequently, the name of the Company M/s. Sesa Sterlite Ltd. has been renamed as M/s. Vedanta Ltd. and the appellants submitted the Certificate of incorporation dated 21.04.2015 from ROC, Goa. Accordingly, change of cause title from M/s. Sterlite Industries Ltd. to M/s. Sesa Sterlite Ltd., to M/s. Vedanta Ltd., is allowed. All the seven miscellaneous applications for change of cause title from M/s. Sterlite Industries Ltd., to M/s. Sesa Sterlite Ltd. and from M/s. Sesa Sterlite Ltd. to M/s. Vedanta Ltd. are disposed of. 2. There are two assessee's appeals and one revenue appeal and all the appeal up are taken up together for disposal as the issues involved are identical and related to valuation of copper anode manufactured and cleaned to their sister units. 3. Appeal No. E/295/2009 was filed by the appellant assessee against the Commissioners Order dated 15.04.2009. Appeal No. E/412/2010 was filed by the appellant against the Commissioner (Appeals) Order No. 89/2010 dated 24.03.2010. Appeal No....
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....tial duty. The appellant submitted Cost Certificate issued by the Cost Accountant arriving cost as per CAS-4 standard. The Commissioner referred the issue to Dy. Director (Cost) who in turn after examining the records submitted his report and the same was given to the assesse. Assesse filed submission and contested Dy. Director (Cost) report after following the principle of natural justice and hearing the appellants. The Commissioner of central Excise in his order dated 15.04.2009 confirmed the demand of deferential of Rs. 13,98,95,414/- and imposed a penalty of Rs. 2 5,00,000/- under Rule 25 of CER, 2001 and dropped penalty under Section 11 AC of Central Excise Act. Hence the present appeal. 5. Appeal No. E/412/2010 and E/406/2010 The Assistant Commissioner has confirmed the demand of differential duty Rs. 6,19,52,363/- for the subsequent period and also imposed a penalty of Rs. 10,00,000/- under Rule 25 of CER, 2001. on appeal the Commissioner (Appeals) in his order dated 29.03.2010, partly allowed the appeal and reduced the assessable value of copper anodes from Rs. 99,742 per MT to Rs. 97,302 per MT and demand reduced to Rs. 4,76,07,671/- and set aside the penalty. Against th....
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....tted that provisional assessment continued for the entire period whereas the Commissioner has taken as provisional assessment from 01.11.202 and not from 01.11.1999. 7. On the issue of foreign exchange fluctuation, he submitted additional evidence and citations. On the merits of the case, he submits that the Commissioner has enhanced the value as per the cost audit submitted by Dy. Director (Cost). He further submits that no notice was issued except by letter dated 05.12.2008 enclosing the DD cost on the foreign exchange fluctuations. He drew the attention of the Bench by relying page 126 of volume I of their submission that they have clearly submitted before the Commissioner that the foreign exchange fluctuation which is not addable to the cost as the fluctuations are speculative in nature. To this he relied on the guidelines issued by the Institute of Cost Accountant annexed to volume-2 at page 102 & 105, wherein it has been clarified that the difference between the actual payment and the amount taken n material cost, the same is taken to the final amount. He further submits that as per the above guidelines it is clarified that loss or gain of foreign exchange of purchase of mat....
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.... CCE, Hyderabad 2011-TIOL-536 2. Toyota Kirloskar Auto Parts PVt. Ltd. Vs. CCE 2012 (276) ELT 332 (Kar.) 3. ITC Bhadrachalam Paperboards Ltd. Vs. CCE, HYD 2000 (115) ELT 527 (Tri.) 4. S.L. Kapoor Vs. Jagmohan & Others 1980 (4) SCC 379 9. Ld. Advocate submits that in view of their application filing for additional evidence they pleaded for allowing their additional grounds in the memorandum of appeal. The additional grounds were enclosed in volume -6 of the paper book. In support of these additional grounds, they have relied on the following citations. 1. M/s. Excel Rubber Ltd. Vs. CCE (supra) 2. J.K. Steel Ltd. Vs. UOI- 1969 (2) SCR 481 3. S.L. Kapoor Vs. Jagmohan & others (supra) 4. Toyota Kirloskar Auto Parts Pvt. Ltd. Vs. CCE, LTU, Bangalore - 2012 (276) ELT 332 (Kar.) 10. Regarding their second appeal filed against the OIA in E/412/2010 (vol-3) he drew the attention to the findings of the OIO passed by the adjudicating authority for the period from 01.07.2000 to 30.06.2001. He confirmed the demand of Rs. 6,19,52,364/-. They filed appeal before the Commissioner (appeals) and he partly allowed the appeal and held that they are entitled to adjustment of the excess ....
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....ith the direction that appellant to meet DD cost and expenditure and clarify the points whereas they have not submitted the figures. Therefore the appellants submissions that no notice was given on the DD cost report is not maintainable. He also submits that if the case is remanded, all issues should be kept open. He made his submissions on the following issues:- a. On the contentions of the appellants whether the assessment is provisional during the disputed period he submits that the entire period of assessment is not covered under the provisional assessment. Even though they have filed the letter dated 01.11.99 for the provisional assessment, they executed bond on 04.12.2000 and they requested again to withdraw the provisional assessment on 04.05.2002. Again they requested to continue provisional assessment and it was again resumed on 01.11.2002. He further submits that as per Rule 7 of CER only the bond and bank guarantee executed provisional assessment commenced from the date of execution. Therefore, he submits that the Commissioner has rightly held that there was no provisional assessment prior to 01.11.2002. He also submits that in even if its treated as the case of provis....
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.... to produce clarification and this cannot be accepted as additional evidence or additional grounds. He also submitted that the case laws relied upon the following case law:- 1. K.R. Engg. Works Vs. CCE, Bangalore-2000 (125) ELT 1218 (T) 2. Kneader House Vs. CCE, Delhi-I-2013 (290) ELT 248 (Tri.-Del) 3. Bhola Plastic Industries Pvt. LTd. Vs. CCE-2011 (269) ELT 411 (Tri.-Del.) 4. Hero Honda Motors Ltd. Vs. CCE, N.Delhi-2000 (124) ELT 552 (Tri.) 5. New India Dyeing & Finishing Mills Vs. CCE-2004 (165) ELT 316 (Tri.-Del.) c. Counter on the forex fluctuations he submits that the adjudicating authority has correctly held forex fluctuations addable as there is difference in provisional invoice and the final invoice and at the time of issue of final invoice cost difference indicates change and the LMA rate is taken at the time of final assessment. He submits that the price includes differential amount to be paid by the buyer at the current rate. He drew the attention of the Bench to the final invoice date 14.11.2000 to be compared with provisional commercial invoice dated 27.06.2000. He further submits that the appellant never submitted any contract before the adjudicating aut....
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.... the attention of the Bench to page 13 of the paper book and page 34B and 34E in this regard, where the figure of Rs. 70,93,398.30 is arrived after deduction of consumption of sulphuric acid. The amount of Rs. 14,58,07,640 which is shown as consumption of sulphuric acid as well as it was deducted twice. g. The professional fees and testing charges, which is correctly added to the cost of production. He refers to page 10, 11 of the paper book and submits that these charges are directly attributable to the procurement of raw materials and has been correctly added as per para 5.1 of cash flow sheet referred to page 122 & 129 of volume I of the appellants paper book. He refers para -26 of appellants claim that these charges and CC charges are not related to procurements and the appellants should prove. He further submits that when the forex fluctuation for the year 2003 which has reduction in the cost of raw material, the same analogy when there is forex loss is to be added in the cost of raw materials (at page 24 of the paper book). He also submits that there is a difference in figures in PLA and trial balance for the year 2002 - 03 to the tune of Rs. 5.10 crores, Rs. 3.85 crores, ....
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....d under the Central Excise and CCR forte licensed units for the period April 2000 to October, 2000. b) The second evidence is Annexure-2 consisting of statement of cenvat and PLA balances of Tuticorin unit for the disputed period certified by the CA. c) Third evidence is annexure-3 relying certificate dated 6.5.13 issued by the same CA styled "Note on accounting of foreign exchange fluctuation in Sterlite industries (India) Limited" along with Trial balance for the period 2000-01, 2001-02 and 2002-03. d) The fourth evidence is annexure-IV dated 28.5.13 issued by Shri.M. Kannan, Cost Accountant clarifying his CAS4 certificate dated 23.12.2005. e) Last evidence in annexure-V is proceedings of the Dy. Commissioner of CE, Tuticorin regarding dispatch of copper anodes from Tuticorin and received at Silvasa. 14. On careful examination, we find that all these evidences were neither submitted before the adjudicating authority nor before the LAA and most of these documents were in the form of certificates signed by the CA or Cost Accountant after adjudication and issue of OIO. On perusal of the proceedings we find that the dispute on valuation of the copper anodes manufactured ....
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....d not applicable to the present case. We rely on the case of K.R. Engg. Works Vs. CCE, Bangalore - 2000 (125) ELT 1218 (Tri.) and Kneader House Vs. CCE, Delhi - 2013 (290) ELT 249 (Tri.-Del.), wherein the Principal Bench dismissed the additional evidences under Rule 23 of CESTAT (Procedure) Rules, 1982. The relevant portion of the said decision is reproduced as under:- "8. It is also submitted that the un-relied documents came in possession of the appellants on 13-9-2007 just before passing of the impugned order. It is pertinent to note that proceedings were initiated not only against the appellants but also against the Prop. of M/s. New Vision and it was party to the adjudication proceedings. No explanation is forthcoming as to why the documents now sought to be relied upon were not produced during the adjudication proceedings either by the appellants through the Prop. of M/s. New Vision or by the Prop. of M/s. New Vision. It is also pertinent to note that the Prop. of M/s. New Vision had been penalized but no appeal has been filed against such order. 9. As rightly pointed out by the DR, the application did not disclose any justification for non-production of the said document....
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....the order and on appeal this Tribunal in its order No. 1111-1115/2005 dated 09.08.2005 set aside the impugned order and directed the authority to determine the value as per CAS4. During the pendency of the appeal before the Tribunal, periodical SCNs were also issued demanding differential duty of Rs. 128,38,41,203/- for the period July 2001 to March, 2002 and another 3 SNCs demanding Rs. 46,211,751/- Rs. 38,62,71,007/- and Rs. 39,96,49,677/- for the period April, 2002 to October, 2002. We find from the records that as directed by the Tribunal in the above orders, the assesse submitted CAS-4 certificate dated 23.12.2005 issued by Cost Accountant for the period July 2001 to March 2002 and for the year 2002 - 2003. As per the Cost certificate, the cost arrived on copper anodes is Rs. 88,091.15 per MT for the period July 2001 to March 2002 and Rs. 87,393/- per MT for the period April 2002 to October 2002. We find that this cost certificate was referred to the Dy. Director (Cost) by the adjudicating authority and the Dy. Dir. (Cost) submitted his report in his working notes annexure-1 and annexure-2 arrived the cost as Rs. 109962/- per MT for the period March 2001 to 2002 and Rs. 107488....
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....ctober, 2002 is correct or otherwise, 3. Whether the penalty imposed by the adjudicating authority is sustainable or otherwise. 18. In appeal E/412/2010 and E/406/2010, the issue before the Tribunal is Whether LAA disallowing the adjustment of excess duty paid against the shortage of duty allowing certain deductions in respect of five issues and reduction of the value from Rs. 99742/- to Rs. 97302/- per MT is correct or otherwise. We propose to examine each issue as under:- 19. On the provisional assessment issue the adjudicating authority in his impugned order held that there is no provisional assessment during the period from July 2001 to October 2002, as the provisional assessment was ordered only w.e.f. 01.11.2002. The assesse contended that the provisional assessment was w.e.f. 01.11.1999. On perusal of the findings of the adjudicating authority and various correspondences relied by the assesse, we find that since the valuation dispute is on copper anodes started in the year 1997 and went through series of litigations from that period resulting Tribunal two Final orders wherein the Tribunals set aside the orders and remand the matter to the original authority to determine ....
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....e supply of highway copper concentrate, it is sen that the terms of contract is based on the % of copper and moisture the quantity shipped was 8738.069 DMT and as per the LME price of copper and based on the % content of copper in copper concentrate and after allowing deductions the provisional value per DMT has been shown as US$ 31.51, the percentage of copper content is 27.000%, moisture 8.9500 based on this workings, the provisional value for the shipment at 100% on the total quantity of 8738.069 DMT has been shownat US$ 2,71,995.72. On perusal of the final commercial invoices dated 19.10.2001 issued by the supplier for the above shipment, we find that there is a change of parameters as against in the provisional invoices as under:- a. Percentage of Copper as per ASSAYs is 27.392% as against 27.000% in provisional invoices b. Percentage of moisture is 8.316% as against 8.9500 % in provisional invoices. c. WMT gross verified at wet 9,598.590 as against 9,5,97.000 d. The amount shown as USD 443.97 as against USD 437.37 in provisional invoices. e. After allowing deductions the price is indicated as US$ 325.50 as against US$ 311.51 and the final price for the total quantit....
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....y included in the cost of raw materials, then there was no further requirement to account these charges under separate head in their P & L account. This clearly shows that these charges were not included elsewhere in the other head. Therefore, the adjudicating authority has rightly added these expenses to the cost as per CAS-4. In the case of deduction of sale value of Sulphuric acid, we find that when the assesse transfer the sulphuric acid of phosphoric acid plant, and cost for each plant he separately worked out to each unit of smelter plant and other plants. Once the cost arrived separately, the question of deducting the sale value of sulphuic acid transfer to phosphoric acid plant is not justified. Therefore, we uphold the adjudicating authority's addition of the amount to the cost of these heads to the cost of copper anodes. IV. To the exclusion of duty drawback amount claimed by the assesse on copper anodes and continuous wire rods manufactured out of copper anodes and exported from their Silvasa unit; even though DD (Cost) in his report proposed for disallowance of deduction of Rs. 70,69,14,974/- the adjudicating authority in his findings at para 25 had discussed the issue....
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.... in the four SCNs the demand amount of Rs. 251 Crores has been scaled down on account of the directions by this Tribunal's Two Final orders, and the original demand reduced to Rs. 13.98 Crores. Therefore, we hold that the appellants contention for remanding the case to the adjudicating authority is not justifiable except to delay the proceedings without any valid grounds. The appellants pleading for Revenue neutrality is also not justified and we find all along they never claimed this aspect in the initial proceedings when the demand was confirmed by the Commissioner and when the case was before this Tribunal twice. Therefore, we hold that there is no justification for their claim on Revenue neutrality. Therefore, taking into account all the above facts, we uphold the impugned order in determining the cost of copper anodes for the period July 2001 to March 2002 as Rs. 94,446/- per MT and Rs. 94,594/- per MT for the period April 2002 to October 2002. Consequently, the demand of Rs. 13,98,95,514/- and interest thereof is liable to be upheld. 22. As regards the assessee's second appeal in E/412/2010, the appellants only prayer is to set aside that portion of the impugned order in ap....