TaxTMI 
TaxTMI 
2024 (1) TMI 663
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.... units, the appellant had determined the cost of the product as per CAS-4 method and accordingly the assessable value as 110% of the cost of the production in accordance to Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 (Central Excise Valuation Rules, 2000 for short). Since independent sale to other buyers are also available, show-cause notice was issued to the appellant demanding differential duty by computing the assessable value of clinkers cleared to sister units in terms of Rule 4 read with Rule 11 of Central Excise Valuation Rules, 2000 for the period from March 2011 to November 2013. The differential duty computed accordingly for the said period amounting to Rs.78,17,68,586/- was demanded with interest and penalty by issuing show-cause notice dated 30.01.2014 invoking extended period of limitation. On adjudication, the demand was confirmed by the learned Commissioner with interest and penalty of equal amount under Section 11AC of Central Excise Act, 1944 read with Rule 25 of Central Excise Rules, 2002; further, the amount of Rs.4,93,93,806/- paid by the appellant was appropriated against the said demand. Assailing the impugned....
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....entral Excise Valuation Rules, 2000 without adopting the comparable goods, which are nearest to time of clearance of goods to own units. The Commissioner has blindly confirmed the demand raised in the show-cause notice without properly applying the principles laid down under Rule 4 of the Central Excise Valuation Rules, 2000 in computing the value and in turn the differential duty, hence bad in law. In support, he placed reliance on the judgment in the case of Tilrode Chem Pvt. Ltd. Vs. CCE, Bangalore [2011(264) ELT 306 (Tri. Bang.); further affirmed by Hon'ble High Court of Karnataka as reported at Commissioner Vs. Tilrode Chem Pvt. Ltd. [2015(317) ELT A190(Kar.)] and in the case of Vinir Engineering Pvt. Ltd. Vs. CCE, Bangalore [2004(168) ELT 34 (Tri.-Bang.)]. g. Further, he has submitted that the quantum of clinker sold to independent buyers is miniscule (approximately 0.05%) compared to clinkers cleared to their sister units for consumption during the relevant period; hence such independent sale be ignored. Further, he has submitted that there is no simultaneous sale to independent customers during the entire period of dispute i.e. March 2011 to November 2013 except only in ....
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....e period March 2011 to December 2012 is barred by limitation. They have not suppressed any facts from the Department by the interpretation of the applicability of the relevant rules has been the subject matter of interpretation by Larger Bench, the differential duty payable by the appellant always is available as cenvat credit to the sister units; hence the effect is revenue neutral. l. Further, he has submitted that in the similar circumstances in the case of Ultratech Cement Pvt. Ltd. Vs. CCE, Bhavnagar [2013(295) ELT 470 (Tri. Ahmd.)] affirmed by Hon'ble Gujarat High Court, CCE, Bhavnagar Vs. Ultratech Cement Pvt. Ltd. [2014(302) ELT 334 (Guj.)], it is held that extended period cannot be invoked. It is stated that the appellant has been filing ER-1 returns indicating the duty paid on transfer of clinkers to sister units, also since their books of accounts, which have been audited by the statutory auditors periodically and they were under the bona fide belief that the applicable rule for determination of value of stock transferred goods to their sister units is assessable under Rule 8 of the Central Excise Valuation Rules, 2000 invoking of extended period is bad in law, hence,....
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....with Rule 11 be applied in arriving at the assessable value of the clinkers transferred to the sister units. The relevant Rules are reproduced below: RULE 4. The value of the excisable goods shall be based on the value of such goods sold by the assessee for delivery at any other time nearest to the time of the removal of goods under assessment, subject, if necessary, to such adjustment on account of the difference in the dates of delivery of such goods and of the excisable goods under assessment, as may appear reasonable. RULE 8. Where whole or part of 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 of such goods that are consumed shall be one hundred and ten per cent of the cost of production or manufacture of such goods. RULE 11. If the value of any excisable goods cannot be determined under the foregoing rules, the value shall be determined using reasonable means consistent with the principles and general provisions of these rules and subsection (1) of section 4 of the Act. 9. We find that this issue has been considered by the Larger Bench of the Tribunal....
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....ppropriate rules for determination of the assessable value of the goods for the transferred clinkers to sister units will be Rule 4 read with 11 of the Central Excise Valuation Rules, 2004 rather than Rule 8 of the Central Excise Valuation Rules, 2000 for the period in question. 11. Regarding the extended period of limitation, we find that the appellant has been declaring the assessable value adopting Rule 8 of the Central Excise Valuation Rules, 2000 and discharging duty during the relevant period. All these facts are recorded in their ER-1 returns and periodically filed with the department; no objection has been raised by the Department on such method of assessment. Therefore, alleging suppression or mis-declaration of facts with intent to evade payment of duty cannot be sustained. In the appellant's own case for the Gujarat Unit, this Tribunal has considered the issue of invocation of larger period of limitation reported as Ultratech Cement Pvt. Ltd. Vs. CCE, Bhavnagar [2013(295) ELT 470 (Tri. Ahmd.)]. Analysing the facts more or less similar to the present one for the period March 2008 to March 2010, though the method of assessment was held to be not correct, it is held that e....
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.... to in what manner the valuation requires to be done in the event of captive consumption of goods as also in case of goods transferred to sister concern or to another factory of the same assessee and till then, Board circular governed the field. And, also because from March, 2008 onwards. On regular basis, the monthly returns have been filed by the assessee respondent indicating all possible details. Thus, the Tribunal rightly turned down the demand of duty prior to the period of one year from the date of issuance of show cause notice dated 09.11.2009, holding the same to have been hit by the law of limitation. 20. In the instant case, we are in complete agreement with the findings of CESTAT, which rightly has concluded from the gamut of facts and evidence that all the materials were available with the Department, which could have been questioned and at no point of time any issue was raised questioning any credential of the respondent with regard to such transfer, the extended period of limitation in the demand notice could not have been sustained. Question of law is appropriately answered by the Tribunal. 13. Following the aforesaid judgments, we are of the view in the presen....