TaxTMI 
TaxTMI 
2016 (6) TMI 577
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.... various inputs during the period 01/04/2000 to 21/02/2003. They had cleared some quantity of inputs as such to their sister unit on reversal of credit availing on such inputs; they have also sold some inputs to independent buyers. The case of the department is that the inputs cleared as such to their sister unit needs to be valued at the prices at which sale was made to independent buyers, the duty liability needs to be discharged accordingly. A show-cause notice was issued for the demand of differential duty by invoking extended period. The adjudicating authority as well as the first appellate authority came to the conclusion that the appellant is required to discharge the duty liability on the inputs cleared as such to their sister unit ....
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....levant period the determination of the value was covered under Section 4 of the Central Excise Act, 1944 and the rules made thereunder. 5. We have considered the submissions made by both sides and perused the records. 6. We find that the issue involved in this case is regarding the valuation of the inputs cleared as such to their sister unit. It is undisputed that the appellant had reversed the Cenvat Credit applicable on such inputs cleared as such. 7. The lower authorities as well as the departmental representative were relying upon the Board Circular No.816/13/2005-CX dated 16/06/2005, according to which the provisions of Rule 57AB (1B) of Central Excise Rules, 1944 or Rule 3 (4) of Cenvat Credit Rules, 2001 and Cenvat Credit Ru....
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.... shall pay an amount equal to the duty of excise which is leviable on such goods at the rate applicable to such goods on the date of such removal and on the value determined for such goods under Section 4 or Section 4A of the Act, as the case may be, and such removal shall be made under the cover of an invoice referred to in rule 7." 10. The Tribunal being the last forum of appreciation of facts has held that transfer of iron ore pellets by IIL to IMIL was not a sale of goods but was only a transfer of raw materials procured under the Tripartite Agreement between the two of them and 7 Page 8 the supplier of the said pellets. This is a pure finding of fact and Shri Radhakrishnan has not been able to dislodge this finding of fact. This bei....
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....age 9 removal should be adopted). Problems will, however, arise where the assessee does not sell the inputs/ capital goods to any independent buyer and the only removal of such input/ capital goods, outside the factory, is in the nature of transfer to a sister unit. In such a case proviso to rule 9 will apply and provisions of rule 8 of the valuation rules would have to be invoked. However, this would require determination of the cost of production or manufacture , which would not be possible since the said inputs/ capital goods have been received by the assessee from outside and have not been produced or manufactured in his factory. Recourse will, therefore, have to be taken to the residuary rule 11 of the valuation rules and the value det....