AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 1402
X X X X Extracts X X X X
X X X X Extracts X X X X
....lways on payment of central excise duty on value arrived by taking into consideration all expenses and costs as per CAS-4 & non-CAS-4 costs; it appeared to the Revenue that the appellants are required to pay central excise duty as per Rule 8 of the Central Excise Valuation Rules, 2000 in view of the Rule 11; two show cause notices dated 07.05.2013 & 21.02.2014, covering the periods April 2012 to January 2013 and February 2013 to December 2013 respectively were issued demanding differential duty; the proposals in the show cause notice were confirmed vide Orders-in-Original dated 01.10.2013 and 14.02.2017 respectively; hence these appeals E/50086/2014 & E/60392/2017. 2. Shri Sudhir Malhotra, learned Counsel for the appellants submits that ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....her submits that the adjudicating authority failed to appreciate that the impugned goods were neither sold by the appellant nor by Indian Railways; they are not also used further in the manufacture of excisable goods and therefore, the Central Excise (Valuation) Rules, 2000 are not applicable; the appellant is paying the duty inadvertently and therefore, the duty paid requires to be refunded rather than demanding the differential duty; Article 265 of the Constitution provides that no tax shall be levied or collected except by the authority of law. He submits that Hon'ble Supreme Court in the case of Bhor Industries - 1989 (40) ELT 280 (SC) held that when the goods are not marketable. 4. Learned Counsel submits that the appellants have co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Government; therefore, learned Commissioner has correctly confirmed the duty. The claim of the appellants that duty has been paid correctly at 110% of the CAS-4 value, is incorrect. He submits that, in fact, the Deputy Director (Cost) observed that the apportionment of cost was on arbitrary basis; depreciation was charged at 40% instead of on a realistic base of 65%. 6. Heard both sides and perused the records of the case. Brief issue that requires our consideration are as to whether: i) the appellants were liable to pay duty on goods manufactured and cleared by them to Railways? ii) Valuation Rules, 2000 are applicable in the instant case? iii) the differential duty, if any, payable by the appellants, was corr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ermined using reasonable means consistent with the principles and general provisions of these rules and sub-section (1) of section 4 of the Act." We find that the show cause notice suddenly jumps to Rule 11 without examining as to why the value cannot be decided under Section 4(1)(a) of Central Excise Act, 1944. The show cause notice and the impugned order appear to assume that the appellants and their customers i.e. Indian Railways are related in terms of Section 4(1)(b) of Central Excise Act, 1944 and Central Excise (Valuation) Rules, 2000, though they do not elaborate on this issue. 9. The impugned SCN and OIO come to the conclusion that the reasonable means to determine the assessable/ transaction value under the said Rule 11 appears....
X X X X Extracts X X X X
X X X X Extracts X X X X
....adjudicating authority; the adjudicating authority is duty bound to give reasons as to why a particular Rule of CEVR 2000 or the procedure provided under the said Rules is followed. For these reasons, we find that the question no. 2 is answered in the negative in favour of the appellants. 11. Coming to the computation of the differential duty, the appellants claim that they have paid duty at 110% of the value arrived as per CAS-4 as the non-CAS-4 value is more than 10% of the CAS-4 value. They also submit that the Deputy Director (Cost) of the Department itself has certified that the non-CAS-4 value is 10.78% and 11.73% during the financial years 2012-13 and 2013-14. We find that learned Commissioner relies on the report of the Deputy Di....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the form CAS-4. We find that an authority like the Deputy Director (Cost) whose report is relied upon by the respondents cannot issue a certificate in such an arbitrary manner without figures and the proper format. (iii) Though the above report speaks of asking the appellants to revise their CAS-4, the copy of the letter does not seem to be endorsed to the appellants. It is not clear whether that report has been received by the appellants and if so, any clarification was obtained thereof. 13. In view of the above, we find that the valuation arrived at in the impugned orders is not justified; the impugned order does not explain as to why the CAS-4 value arrived by the appellants and on which they claimed to have paid duty, is inc....