TaxTMI 
TaxTMI 
2020 (1) TMI 757
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....nd required to pay duty as Part of the quantity of scrap also sold as such to the independent customers. The quantity of waste/scrap used in the manufacture of reprocessed granules which are cleared under Notification No.6/2002-CE or 4/2006-CE. The appellant adopted the assessable value which is same assessable value charged in the case of sale of waste and scrap to independent customer. The case of the department is that in the case of captive consumption of waste and scrap for the manufacture of exempted reprocessed granules. The valuation should have been done on Cost Construction Method as per CAS-4 Standard, prepared by Institute of Cost and Works Accountants of India. Accordingly due to value difference demand of Excise Duty arose and the same was confirmed by the Adjudicating Authority. Therefore, the present appeal is filed. 2. Sh. J.C. Patel, Learned Counsel appearing on behalf of the appellant submits that even though the waste and scrap was captively consumed but part of the same waste and scrap is sold on Principle to Principle basis to the independent customer, price charged to the said customer shall be the assessable value even in case of captive consumption. In t....
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....tion to the present case. Since, there was no willful suppression of facts or misstatements. The appellant was filing ER-3 returns and maintaining complete records. A Show Cause Notice is not issued as result of any search, seizure of documents but on observations made in audit from the records maintained by the assessee as stated in the Show Cause Notice. In such circumstances larger period of limitation cannot apply as laid down in the following judgments. • Hira Cement vs C.C.E. 2017 (4) GSTL 75 • GAC shipping (India) P. Ltd. Vs C.C.E 2017 (49) STR 242 That apart by adopting the price at which waste/scrap was sold to independent buyers, the appellant has acted in a bona fide manner. The view eventually taken by the Larger Bench in Ispat Industries Ltd. is infact in consonance with the course adopted by the appellant. Therefore, there is no question of invoking larger period of limitation. 6. On the other hand Sh. Sameer Chitkara, Learned Additional Commissioner (Authorized Representative) appearing on behalf of the revenue reiterates the finding of the impugned order. 7. We have carefully considered the submissions made by both the sides and pe....
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....Cause Notice that the waste and scrap cleared for captive consumption and the one sold to the independent buyers are different. 11. We also find that no investigation was carried out to establish that the waste and scrap sold and captively consumed are different in nature. We also observe that the waste and scrap as generated in the course of manufacture of BOPP film. Therefore, there cannot be different category of waste in one process of Manufacture of BOPP film. The entire Show Cause Notice was issued only on the basis of Rule 8 of Valuation Rules and CBEC Circular dated 30.6.2000, however this dispute has been resolved by the Larger Bench of this tribunal in the case of Ispat Industries Ltd.(supra) according to which even though goods were not sold and used captively, the valuation of such goods shall be on the basis of the Sale Price of such goods sold to the independent buyers. Therefore, after delivering the judgment of Larger Bench the dispute came to the rest. The Adjudicating Authority relied upon the invoices issued for captive consumption and for sale of the goods and the comparative chart was prepared which is reproduced on Page No.13 & 14 of the impugned order. The....
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....onsumed. Therefore, the conclusion of the Adjudicating Authority that both types of clearances are of different waste and scrap is not tenable. We find that the appellant has correctly valued the goods in conformation to the Larger Bench judgment in the case of Ispat Industries Ltd. The relevant order is reproduced below. "5. We have considered the rival submissions and are of the view that the assessee is correct in contending that provisions of Rule 8 would apply only in a case where its entire production of a particular commodity is captively consumed. This is evident on a plain reading of Rule 8 of the valuation rules, which reads as under "Where the excisable goods are not sold by the assessee but are used for consumption by him or on his behalf in the production or manufacture of other articles, the value shall be one hundred and ten per cent of the cost of production or manufacture of such goods" (emphasis supplied). If the intention was not to restrict the applicability of Rule 8 to cases where the entire production was being captively consumed, the Rule would have simply stated "where excisable goods are consumed by an assessee himself or on his ....
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....ically prescribe such sequential application of various rules, the same, in our view, is the only reasonable way to read these rules. Any other interpretation would only lead to confusion and chaos. Since the applicability of Rule 4 is not really in dispute, there was no need to look further and regardless of the applicability or otherwise of Rule 8, the assessable value should have been determined in terms of Rule 4 of the Valuation Rules. 8. The conclusion that we are drawing in the present case would lead to determination of a value which, in our view, will not only be reasonable but also consistent with the provisions of Section 4 of the Central Excise Act. We would, at this stage, draw support from the judgment of the Supreme Court in the assessee's own case, as reported in 2006 (202) E.L.T. 561, wherein the Court applied "The Gunapradhan Principle" in interpreting the Customs Valuation Rules. We have kept in mind the following observations of the Court in coming to our above conclusion : "26. In our opinion if there are two possible interpretations of a rule, one which sub-serves the object of a provision in the parent statute and the other which does not, w....