TaxTMI 
TaxTMI 
2024 (8) TMI 260
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....rch at the business premises of the Appellant's company, residential premises of Director and at some other places. The search continued till 23.06.2016, on which date, an amount of Rs.50 lakhs was deposited by the Appellant vide TR-6 Challans. During the course of search, some loose slips were recovered from the residence of the Director which could not be explained by him in his statement dated 23.06.2016. Show Cause Notice dated 05.06.2017 was issued by DGCEI, Kanpur Regional Unit, Kanpur proposing as under:- i. The Cenvat duty amounting to Rs.22,91,574/- (Rupees Twenty Two Lakhs Ninety One Thousand Five Hundred Seventy Four Only) (Central Excise duty: Rs.22,49,703/ + Education Cess : Rs.27,915/- + Secondary & Higher Education Cess: Rs.13,956/-) involved on different issues as tabulated in Para No.33 above for the period from May' 2012 to Sep' 2016 should not be demanded and recovered from them under proviso to Sub-section (4) of Section 11A of Central Excise Act, 1944 and the Cenvat duty amounting to Rs.50,706/ deposited from PLA vide entry No.05 dated 23.06.2016 may not be appropriated towards their liability on short found finished goods and rest of the duty may not ....
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....12 dated 29.06.2017. The Appellant also deposited interest amounting to Rs.7,300/- vide Challan No.02204112906201700043 dated 29.06.2017 and 15% penalty of Rs.6,454/- vide Challan No.02204112906201700012 dated 29.06.2017. Order-in-Original dated 11.10.2017 was passed by the Assistant Commissioner of CGST & Central Excise Division-II Agra as under : - "49. Accordingly, I pass the following order:- i. I confirm the demand of Cenvat duty amounting to Rs.22,91,574/- (Rupees Twenty Two Lakhs Ninety One Thousand Five Hundred Seventy Four Only] (Central Excise duty: Rs.22,49,703/- + Education Cess: Rs.27,915/- Secondary & Higher Education Cess: Rs.13,956/-) involved on different issues as discussed supra for the period from May' 2012 to Sep' 2016 under proviso to Sub-section (4) of Section 11A of Central Excise Act, 1944 read with Section 142 and Section 174 of the CGST Act, 2017. I also order to appropriate the Cenvat duty amounting to Rs.50,706/- deposited from PLA vide entry No.05 dated 23.06.2016. I further order to appropriate the Cenvat duty Rs.43,026/- deposited by the party vide challan No.00012 dated 22.06.2017. Since the party has also already deposited Rs.50 L....
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....ssion of facts with intent to evade payment of Cenvat duty. vii. I impose penalty Rs.10,000/- (Rs Ten Thousand Only) upon them under Rule 27 of Central Excise Rules 2002, for contravention of the provisions of Rule 4, 5, 6, 8, 10 and 11 of the said rules read with Section 142 and Section 174 of the CGST Act, 2017. viii. I impose penalty Rs.10,000/-(Rs Ten Thousand Only) upon them under Rule 15A of Cenvat Credit Rules, 2004 for the contravention of the Rule 3, 4, 6 and 9 of Cenvat Credit Rules, 2004 read with Section 142 and Section 174 of the CGST Act, 2017. ix. I impose penalty Rs.50,000/-(Rs Fifty Thousand Only) upon Shri Ram Niwas Gupta, Director of the party under Rule 26 of Central Excise Rules, 2002 read with Section 142 and Section 174 of the GGST Act, 2017 in the light of the facts as discussed supra." Being aggrieved the Appellants filed appeals before the First Appellate Authority which was partly allowed and modified as under:- "DISCUSSION & FINDINGS: 6. I have gone through the case record. Several issues are involved in this appeal and the same are taken up separately as under:- (i) Cost of Transportation: ....
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.... recorded in Para 28 of SCN, the Director of the appellant company in his statement owned the loose papers and agreed to pay the duty involved therein The appellant argues that there is no evidence to prove clandestine production and removal However, as the appellant owned the said loose papers and agreed to pay duty involved therein, there was no occasion to investigate the matter further It is not the case of the appellant that the said statement was retracted. Hence, there is no ground to contest the matter at this stage Hon'ble Supreme Court in the case of SYSTEMS & COMPONENTS PVT LTD, reported at 2004 (165) E.L.T. (136 (SC), has held that what is admitted need not be proved. (vi) Supply of Solvent Cement: The appellant have supplied Solvent Cement free of cost with PVC pipes to M/s UP Jal Nigam Ltd. and M/s UP State Agro Corporation Ltd under the contract rate. The same is purchased from the market and supplied to the buyer as such. No additional amount is recovered from the buyer. The appellant has argued that value of such bought out items is not includible in the assessable value as held by Hon'ble Tribunal in the case of ITI LIMITED, reported at 2....
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....4,99,078/- 3. The Appellants have filed the present appeals before the Tribunal. 4. Learned Advocate appearing on behalf of the Appellants submits that in addition to quality tests conducted at its unit, the Appellant also got the third party inspection conducted at the instruction of the buyers from third parties, cost of which was initially paid by the Appellant but ultimately borne by the buyers. It is the case of the Revenue that the inspection charges were included in the rates quoted/awarded to the Appellants. The Appellants were required to pay inspection charges directly to the third parties inspection agency and recovered the same from the buyer, but the inspection charges were not separately mentioned in the invoices, thus it can be concluded that sale was subject to such inspection and therefore includible in the definition of "transaction value". The learned Advocate further submitted that in the present case no duty can be demanded on third party inspection charges, inasmuch as:- (i) The Appellant has already paid duty on the price actually paid by the buyer, which is not inclusive of third party inspection charges; (ii) Further, the third party....
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....lates to amounts of Rs.50,706/- (deposited prior to the issuance of SCN) and Rs.43,026/- (deposited within one month of the issuance of SCN alongwith interest and 15% penalty). Both the aforesaid deposits have been considered in the Order-in-Original wherein both the aforesaid amounts have been appropriated, but no finding has been recorded on the same in the Order-in-Appeal. The Appellant's contention in this regard is that since the Commissioner (Appeals) has quantified the total demand at Rs.4,99,078/-, which includes these two amounts and these two amounts have already been appropriated, hence these two amounts needs to be reduced from the total demand. Further, the penalty quantified by the Commissioner (Appeals) i.e. 15% of Rs.4,99,078/-, is also liable to be reduced accordingly, since on Rs.43,026/- 15% penalty has already been deposited and Rs.50,706/- stands appropriated, requiring appropriate reduction in quantum of duty and consequential penalty. 6. He further submits that penalty imposed on the Director is unwarranted and prayed that the same should be set aside. 7. Learned Departmental Authorized Representative justified the impugned orders and prayed that the ap....
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....e same scheme continues. Only, Section 4(2) is in terms replaced by Rule 5 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000." 10. We further find that the Hon'ble Supreme Court in the case of CCE, Pondicherry vs. Acer India Ltd. reported as 2004 (172) E.L.T. 289 (S.C.) wherein it has been held that only because the expression, "by reason of sale, or in connection with the sale" has been used in the definition of "transaction value", the same by itself would not take away the rigors of charging section. The relevant paragraphs are reproduced as under:- 54. It may be true that the definition of "Transaction Value" which is incorporated in Clause (d) of Sub-section (3) of Section 4 for the purpose of said Section states that the price actually paid or payable for the goods, when sold, would include in addition to the amount charged as price, any amount that the buyer is liable to pay to, or on behalf of, the assessee, by reason of, or in connection with the sale. Only because the expressions "by reason of, or in connection with the sale" have been used in the definition of "Transaction Value", the same by itself would not take away th....