TaxTMI 
TaxTMI 
2022 (9) TMI 1459
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....3,73,007/- already paid by the assessee towards duty and I order for recovery of the balance amount of duty amounting to Rs.2510080/- from M/s Finolex Cables Limited. 26-27, Mumbai - 3Pune Road, Pimpri, Pune 411 018., b) I order recovery of Interest at an appropriate rate on the aforesaid determined duty amount from M/s Finolex Cables Limited. Mumbai Pune Road, Pimpri, Pune 411 018, under section 11AB of Central Excise Act 1944, c) I impose penalty of Rs. 38,83,087/-, (Rupees Thirty Eight Lakhs Eighty A Three Thousand Eighty Seven only) upon M/s Finolex Cables Limited, Mumbai - Pune Road, Pimpri, Pune 411 018 under section 11AC of the Central Excise Act 1944, provided that where the entire amount of duty and interest is paid within 30 days from the date of receipt of this order, the benefit of reduced penalty of 25% under the proviso to Section 11AC of the Central Excise Act 1944 shall be available to them, provided further that the amount of penalty so determined has also been paid within the stipulated period of thirty days. 21. This order is issued without prejudice to any other action that may be taken under this law or any other law for the time being in force in India."....
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....e of intermediate goods to their own units under the provisions of proviso to Section 11A(1) of the Central Excise, Act, 1944. Further, the amount of Rs. 13,73,007/- already reversed by them should not be adjusted against the said demand; and for recovery of interest under the provisions of Section 11AB of the Central Excise Act, 1933; and for imposition of penalty under the provisions of Section 11AC of the Central Excise Act, 1944. 2.3 A corrigendum dated 05-05-2010 to the Show Cause Notice dated 31-03-2010, was issued to incorporate the demand for the period 2005-06 also, as the appellants had not submitted the CAS-4 certificate for the financial year 2005-06 and hence the short payment for the Year 2005-06, was worked out and the demand under the provisions of proviso to Section 11A(1) of the Central Excise Act, 1944 for the years, 2005-06 and 2006-07 was revised to Rs. 38,83,087/-. 2.4 The adjudicating authority vide order-in-original referred in para 1.2 above adjudicated the show cause notice. 2.5 The Commissioner (Appeals) vide Order-In-Appeal No PI/RKS/68/2011 dated 11-04-2011 dismissed the appeal without going into the merits of the appeal, holding therein that debit i....
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....o set aside. o Special Steel Ltd. 2015 (329) ELT 449 (T.) Affirmed by Supreme Court in 2016 (334) ELT A123 (S.C.) o Anglo French Textiles [2018 (360) ELT 1016 (T.)] Affirmed by Supreme Court in 2018 (360) ELT A301 (S.C.) o Indeos ABS Ltd. 2010 (254) ELT 628 ( Guj.) o SRF Ltd.[2007 (220) ELT 201 (T.)]Affirmed by Supreme Court in 2016 (331) ELT A138 (S.C.) o Sanvijay Rolling & Engineering Ltd. [2018 (11) GSTL 344 (Bom.)] CESTAT Final Order No. A/85373-85374/17/EB dated 20.9.2016 in the matter of Mahindra & Mahindra Ltd. (Page 48 - 58 of case law compilation) Affirmed by Supreme Court vide order dated 25.2.2019 passed in the matter of Commissioner of CGST & CX. Vs. Mahindra & Mahindra in Civil Appeal No.2409-2410 of 2019 Without prejudice, even if annual CAS-4 is applied, excess duty paid within the year should be adjusted with the short payment of duty. o TAL Manufacturing Solutions Ltd. [2005 (188) ELT 342 (T.)] o TAL Manufacturing Solutions Ltd. [2007-TIOL-1787- CESTAT-MUM] o Essar Steel India Limited [2016 (9) TMI 1175- CESTAT-NEW DELHI] o Jindal Steel & Power Ltd. [2016 (342) ELT 253 (T.)] o Godrej Consumer Products Limited [2017 (12) TMI 1091-CESTAT....
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....d in contravention of the provisions. Hence, penalty is not imposable on the Appellants under Section 11AC of the Central Excise Act, 1944. Further, the issue in dispute involves interpretation of legal provisions as valuation of goods is a pure question of law. Penalty is not imposable for this reason as well. Interest is not recoverable from the Appellants. Cove 18. The demand for differential duty confirmed by the impugned Order-in-Appeal is not sustainable in law. It is settled law that when the original demand is not maintainable, interest cannot be recovered. Therefore, since the demand is not sustainable, question of recovering interest does not arise. 3.3 Arguing for the revenue learned authorized representative while reiterating the findings recorded in the impugned order submits The invoices annexed by the Appellants at page nos.37 to 44 clearly show that the assessee only mentioned that the goods were cleared under Rule 8 of Valuation Rules, 2000 and duty payable on ass. value computed on the basis of 110% of cost of production. However, they suppressed that the cost was not arrived at based on the relevant and proper CAS-4 certificate. The ratio of the follow....
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....ts by 10 to 15% to take care of 'inflation and other factors'. CAS-4 standard require material receipts to be valued at purchase price at the time of acquisition. Thus, the appellants have deviated from the standards set out by the ICWAI while arriving at the cost of production. By adding 10 15% to take care of inflation, the appellants have tried to bypass the requirement of working of cost of production after audit of financial accounts at the close of the year. As such, the learned adjudicating authority interalia has rightly held that the method of costing adopted by the appellants is incorrect and final cost can be exactly ascertained only after finalization of the accounts. This view is supported by Hon'ble CESTAT's decision in case of Hindustan Copper Ltd. V/s Commissioner of Central Excise, Bhopal (2005 (191) E.L.T. 665 (Tri.Del.)] wherein while remanding the matter back for readjudication, CESTAT has held as under : 'Valuation (Central Excise) - Copper concentrate produced and captively consumed C.B.E. & C. circular dated 13-2-2003 clarifying that cost of production of captively consumed goods should be determined in terms of CAS-4, a standard of valu....
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....ect assessable value of the goods cleared for captive consumption which has not been followed or complied with by the appellants. Under the circumstances, the adjudicating authority interalia has correctly and legally demanded and confirmed the differential duty. 10.4. I find that the argument on the grounds of revenue neutrality is also not of great help to the appellants. The appellants have relied on the following case laws to support their contention of revenue neutrality, as the duty paid by the appellants would be available to their other unit as СENVAT credit: i. CCE & C (Appeals) V/s Narayan Polyplast (2005(179)ELT(20(SC) ii. CCE & C V/s Narmada Chemature Pharmaceuticals 2005 (179) ELT 276 (SC)] iii. CCE V/s Textile Corporation (2008(231)ELT 195(SC)] iv. CCE V/s Jamshedpur Beverages (2007(214 ELT321(SC) v. CCE V/s Coca Cola India(P) Ltd. [2007(213)ELT 490(SC)). 10.4.1 I however find that the aforesaid case laws deal with situations involving availing of exemption notification or undervaluation of goods, the credit of which was available to other unit. In none of these cases, the undervaluation was on account of mis-declaration or provisional declaration.....
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....ced. As per chapter 6.8 of ICWAI guidelines, the cost of production can be determined on the basis of previous quarterly result also. The Appellants have appropriately taken cost figures of the previous month's CAS-4 certificates as a basis to arrive at the cost of production of each month. There was no objection whatsoever by the department at any point of time. For the first time in February 2008, during the course of audit for the period April 2006 to March 2007, this practice was objected and the Appellants were asked to redetermine cost of production on the basis of final annual CAS-4 of April 2006 to March 2007. 4.4 If the Appellants are to value their clearance on the basis of annual CAS-4 figures, they have paid excess duty in some instances as is admitted in the show cause notice, order in original and the impugned order. Further the both the authorities have concluded in the order against adjustment of the excess payment of duty against short payment on the ground of unjust enrichment. Both authorities also hold that the assessments were provisional. The stand of the lower authorities is self contradictory and contrary to the observations made by the Hon'ble Apex Cou....