TaxTMI 
TaxTMI 
2025 (12) TMI 5
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....ue. The order, therefore, confirms the short-paid duty with interest and penalty. 2. Customs Appeal No. 50598 of 2019 has been filed by Mukesh Sharma, former General Manager (Marketing) of the appellant, to assail that portion of the order dated 26.11.2018 passed by the Commissioner that imposes penalty upon him. 3. Customs Appeal No. 50599 of 2019 has been filed by Nirmal Uday, former Executive Vice President of the appellant, to assail that part of the order dated 26.11.2018 imposes penalty upon him. 4. The appellant was engaged in the manufacture of CR galvanized/colour coated coils/sheets, falling under Chapter 72 of the Central Excise Tariff. The goods were manufactured and cleared in different sizes and thicknesses, as per the requirement of the customers or market demand. Such goods were sold to customers from the factory gate of the appellant as well as from the stock transferred to various depots. In case of goods sold at the factory gate, duty was paid on the transaction value and there is no dispute with regard to these goods. In respect of the goods stock transferred to depots, since transaction values of goods to be sold was not ascertainable, the appellant pa....
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....he course of arguments, the learned Counsel submitted a copy of such report given by the Jurisdictional officer. We have perused the finding recorded in the impugned order on this aspect. We note while the Original Authority accepted the calculations and verifications made by the Jurisdictional officer along with the certificate of Chartered Accountant submitted by the appellant for three years. For the remaining three years he upheld the demand of differential duty. The reason recorded is that the data is taken from the appellant's record and admitted as correct by the representative of the appellant. On this, the learned Counsel submitted that the data based on sale invoice running into more than 200 pages were shown to the representative who admitted these are invoice data. This will not lead to the conclusion that the differential duty calculation is admitted as sustainable. In any case, we note that the facts are to be found from the records and the verification report by the Jurisdictional officer which is based on statutory ER - 1 returns of every month filed by the appellant during the material time cannot be disputed. We note the Original Authority did not give any accepta....
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....t the order has confirmed the demand under rule 11 of the 2000 Valuation Rules. Thus, by confirming the demand under rule 11, reliance on rule 7 as proposed in the show cause notices has been abandoned by the department itself and, therefore, the demand confirmed is unsustainable in law. In support of this contention reliance has been placed upon the following judgments of the Supreme Court: (a) Commissioner of C. Ex., Nagpur vs. Ballarpur Industries Ltd. [2007 (215) E.L.T. 489 (S.C.)]; (b) Commissioner of Central Excise vs. Gas Authority of India Ltd [2008 (232) E.L.T. 7 (S.C.)]; (c) Godrej Industries Ltd. vs. Commissioner of C. Ex., Mumbai [2008 (229) E.L.T. 484 (S.C.)]; (ii) The depot price list gave indicative prices and could not have formed the basis for valuation either under rule 7 or under rule 11 of the 2000 Valuation Rules. The pricing of the goods being dynamic, actual sale could be at a price higher or lower than the price in the Price List. In cases where the goods were sold at prices higher than the prices adopted at the time of clearance of the goods from the factory, the appellant worked out and paid the differential duty on its ....
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.... period from June, 2009 to August, 2009. The said demand, though already paid by the appellant, is beyond the period of five years invoked in the first show cause notice dated 08.10.2014; (viii) The impugned order imposes penalties equal to 50% of the demand confirmed upon the appellant under section 11AC of the Central Excise Act. The Tribunal, in the order dated 17.10.2017, while remanding the matter held that the case does not call for imposition of penalties. In the absence of any appeal by the department, the said finding has attained finality; and (ix) Penalties could also not have been imposed on Mukesh Sharma and Nirmal Uday. 11. Shri S.K. Ray, learned authorized representative appearing for the department, however, supported the impugned order and made the following submissions: (i) The Commissioner held that duty was payable on Price List values as these were consistent with rule 11 of the 2000 Valuation Rules and section 4(1) of the Central Excise Act, 1944 [the Central Excise Act] reflecting the best reasonable price for goods removed from the factory; (ii) The department discovered the undervaluation during searches on 19.12.2013.....
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....ice of the goods at the depot was higher than the assessable value adopted at the time of clearance of the goods from the factory, the appellant paid the differential duty on its own on a monthly basis and reflected it in the ER-1 returns. 15. However, a show cause notice dated 08.10.2014 was issued to the appellant for the period from June, 2009 to December, 2013, invoking the extended period of limitation alleging that the goods cleared by the appellant from the factory to the depots were undervalued and duty on such goods was required to be paid on the basis of the Price List in terms of rule 7 of the 2000 Valuation Rules. This show cause notice along with two other periodical show cause notices dated 05.02.2015 and 28.04.2015 covering the period from June, 2009 to December, 2014 were adjudicated by the order dated 28.01.2016. 16. It is against this order that the appellant and Nirmal Uday filed two appeals before the Tribunal. The Tribunal found that the contention of the appellant that they had discharged much higher duty than the amount determined had force and, therefore, required re-verification. The Tribunal also recorded a specific finding that the matter did not re....
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....capture the market. Therefore the judgment if the Hon'ble Supreme Court in case of FIAT India Ltd. will also be relevant here. ***** 46. ***** Since the prices shown in the Price lists were payable at the time of removal, the same would be the best price for assessment of the goods for payment of duty in terms of Rule 11 of the CEVR and Section 4 of the Central Excise Act, 1944." (emphasis supplied) 18. The contention of the learned counsel for the appellant is that the Price List that was issued to the depots only gave indicative prices for sale of goods. The sale could be at a price higher or lower than the price mentioned in the Price List. In cases where the goods were sold at higher prices than the assessable value adopted at the time of clearance of the goods from the factory, the appellant paid the differential duty and reflected the same in the ER-1 returns filed every month. This fact also emerges from the ER-1 returns that have been filed by the appellant. 19. Rule 7 of the 2000 Valuation Rules is reproduced below: "RULE 7. Where the excisable goods are not sold by the assessee at the time and place of removal but are tra....
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....ed at the time of clearance of the goods from the factory, the differential duty was paid by the appellant which is also reflected in the ER-1 returns. Thus, the transaction value could not have been determined on the basis of the prices mentioned in the Price List. 24. The valuation of the goods could not have been determined under rule 11 of the 2000 Valuation Rules on the basis of the prices mentioned in the Price List. 25. It also transpires from the chart referred to by the Commissioner in paragraph 51.2 of the order that for the period from September, 2009 to December, 2013, as against the differential duty payable of Rs. 13,02,67,932/-, the appellant paid an amount of Rs. 16,65,35,816/- which resulted into excess payment of Rs. 3,62,67,884/-. 26. The appellant has also worked out the duty from January, 2014 to June, 2017, which is supported by the Chartered Accountant Certificate. As against the differential duty payable of Rs. 5,98,21,607/- the appellant paid an amount of Rs. 6,80,62,960/-. 27. The show cause notice dated 08.10.2014 has invoked the extended period of limitation on the ground that the appellant did not disclose to the department the pattern of va....