TaxTMI 
TaxTMI 
2024 (2) TMI 299
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....lted in undervaluation of the goods and short-payment of duty. Triumph and the appellant are related parties as Triumph is the holding company of the appellant company. The shareholding ratio indicated that the appellant and Triumph were controlled directly or indirectly by Triumph International Spleesshofer Braun AG, Switzerland and both the companies are controlled directly or indirectly by third person as provided under Rule 2(vi) of Customs Valuation Rules, 2007 (CVR for short) inasmuch as the ultimate holding company has a directive control over all the activities of the said units. It was also noted that the Directors were common in one another's businesses as provided under Rule 2(i) of CVR. 3. In view of the above, the appellant and Triumph are related parties as per Rule 2 of the Customs Valuation (Determination of Price of Imported Goods) Rules, 2007. It appeared to the department that the value to be adopted by the appellant for the clearances to DTA through their related buyer should be the sale value adopted by Triumph. The removal of goods by 100% EOU to DTA is governed by Section 3 of Central Excise Act, 1944 r/w Rule 17 of Central Excise Rules, 2002. As per Secti....
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....duty during the period 2005 - 06 to August 2010. Later, the present Show Cause Notice has been issued on 1.3.2013 invoking the extended period demanding duty from 2/2008 to 5/2010. It is very much established that the department had knowledge about the transactions, and it cannot be said that appellant has suppressed facts. 7. The learned counsel has argued that while computing the aggregate customs duty for the goods cleared by them to DTA, the appellant had inadvertently included the additional customs duty (CVD) although they are eligible for exemption under Notification No. 30/2004-CE dated 9.7.2004. The appellant has not taken CENVAT credit on inputs and having complied with the condition of the notification would be eligible to avail the exemption of CVD. The appellant has paid higher excise duty by not availing the exemption of CVD. The adjudicating authority has held that appellant is not eligible for exemption under Notification No. 30/2004-CE. The learned counsel relied upon the judgment of the Hon'ble High Court of Himachal Pradesh in the case of Satya Metals Vs. UOI - 2013 (290) ELT 514 (HP) wherein the Hon'ble High Court held that for the DTA clearances by E....
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....nd. It is pointed out by the learned counsel that only after appellant had issued a reply informing about application of Central Excise Valuation Rules erroneously, the department has adopted the Customs Valuation Rules to issue this Show Cause Notice. All this would show that the appellant has been fully fair, cooperative and has not suppressed any facts with intent to evade payment of duty. The learned counsel prayed that the impugned order may be set aside. 10. The learned AR Shri N. Satyanarayanan appeared and argued for the department. Para 39 of the impugned order was adverted to by the learned AR to argue that the appellant had requested for adjustment of CVD which they had inadvertently paid without availing the exemption under Notification No. 30/2004-CE. Such question of adjustment of duty does not arise. The adjudicating authority has rightly rejected the request of the appellant for adjusting the availment of exemption towards the differential duty demanded in the Show Cause Notice. The learned AR prayed that appeal may be dismissed. 11. Heard Both sides. 12. The issue to be decided is whether the demand, interest and penalties imposed alleging that the appella....
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....ing for recovery of duties not levied or short-levied or erroneously refunded, for any reason other than collusion or any willful misstatement or suppression of facts. In substance, there were really two grounds for the show cause notice: (a) that the appellant, knowingly, did not declare the brand of imported goods, and undervalued the same with the intent of evading Customs duty; (b) that the appellant had imported the branded goods from its related party, and had undervalued the same to evade Customs duty. ******** ********* ******* 21. We are however, not persuaded by this argument because there appears to be a fundamental mistake committed in the manner of implementation of the statutory Rules. Once the statutory Rules exist and provide for sequential implementation, the assessing authority has no option but to proceed in accordance with those Rules, in that manner. We did put this squarely to learned Senior Counsel for the respondent, who really could not persuade us, or give a satisfactory answer as to why the concerned authority chose to ignore, in the given facts of the case, Rules 3 to 5, and did not proceed "sequentially". 22. The r....
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....pon Central Excise Valuation Rules which is incorrect on law for the following reasons: Under Section 3 of the Central Excise Act normally Excise duty is payable by any manufacturer on the value as per Central Excise Act read with Central Excise Valuation Rules. But through a proviso under Section 3, there is an exception to the general provision in respect of sale into DTA by a 100% EOU, According to this proviso the excise duty on such DTA sale by a 100% EQU would be the aggregate duty of customs which will be leviable under the Customs Act, 1962 (52 of 1962) or any other law for the time being in force, on like goods produced or manufactured outside India if imported into India, and if the duties of customs are chargeable by reference to their value; the value of such excisable goods should be determined in accordance with the provisions of the Customs Act, 1962 and the Customs Tariff Act, 1975. Hence for the purpose of valuation of DTA sales or removal by a 100% EOU, CE Valuation Rules are not relevant. Therefore, raising of objection on value adopted by us based upon Central Excise valuation rules 9, 10 etc cannot be sustained in our view. Audit may ....