TaxTMI 
TaxTMI 
2025 (12) TMI 363
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....hort paid duty and finally on their own, calculated and paid the differential duty of Rs. 81,481/- for the Financial Year 2014-15. The following chart shows value adopted for payment of excise duty in respect of both the products and the value which should have been adopted as per CAS-4:- (Value in Rs. Per MT) Period CAPROLACTAM SULPHURIC ACID Invoice value 110% of CAS 4 figure Invoice value 110% of CAS 4 figure April 2014- September 2014 1,47,295 1,49,020 3,577 3,079 October 2014 1,56,397 1,49,020 2,103 3,079 Nov 2014 - March 2015 1,65,454 1,49,020 2,103 3,079 1.1 A Show Cause Notice dated 05.12.2017 was issued to the Appellant demanding short paid Central Excise duty of Rs. 12,75,143/- under Section 11A of the Central Excise Act, 1944 along with interest under Section 11AA of the said Act and penalty under Rule 25 of the Central Excise Rules, 2002. The matter was adjudicated vide order dated 25.02.2019 wherein the above duty was confirmed against the appellant along with interest and penalty equal to Central Excise duty of Rs. 12,75,143/- was imposed under Rule 25 of the Central Excise Rules, 2002. Aggr....
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.... (T) - CCE vs. Yamuna Gases & Chemicals Ltd. (xviii) 2003 (153) ELT 497 (SC) - CCE vs. Divya Enterprises Ltd. 2000 (115) ELT 66 (T) (xix) 2016 (342) ELT 253 (T) - Jindal Steel & Power Limited vs. CCE (e) The goods cleared by them have been consumed in their sister concern which has availed the credit of the duty so paid. This is a case of Revenue neutrality and on this principle, the impugned Show Cause Notice is liable to be quashed. They relied on the decision of Ahmedabad Tribunal vide order No. A/2438/WZB/AHD/08 dated 10.11.2008 in the case of Ineos ABS Limited which has been further upheld by Hon'ble Gujarat High Court reported in 2010 (254) ELT 628 (Guj.). The appeal filed by the department against the said order of Gujarat High Court was dismissed by Hon'ble Supreme Court as reported in 2011 (267) ELT A-155 (SC). (f) The impugned Show Cause Notice dated 05.12.2017, covering the period from April 2014 to March 2015 is time-barred. The clearances made by them were duly reflected in excise returns. The recipient unit has also reflected receipt of said duty paid goods in their Cenvat credit register. On receipt of CAS-4 certificate, th....
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....d this issue in detail. It held that overall duty liability/ short payment should be arrived at after considering the duty already paid during that year on such goods. It also held that adjustment of short/ excess paid duty is permissible against demand determined based on annual costing. It considered the decision of Tribunal in the case of Essar Steel India Limited (supra) and Jindal Steel and Power Limited (supra). The relevant findings in para 7, 11 and 13 are reproduced below:- "7. The Tribunal while relying on the decision in Jindal Steel & Power Ltd. v. Raipur-1 - 2016 (342) E.L.T. 253 (Tri. - Delhi) and Essar Steel India Ltd. v. CCE, Raipur - 2017 (345) E.L.T. 139 reversed the order, holding : "7. We have considered the submissions made by both sides. The goods have been cleared by the appellant to their own sister unit located in tax exempted areas. Consequently, the appellant is require to pay excise duty on goods so cleared. The basis of valuation is also required to be done in terms of Rule 8 of the Central Excise Valuation Rules, 2000 following the Cost Accountant Standards (CAS-4). It is not in dispute that valuation has been done properly as per CAS....
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....AS-4 for that period and paid duty. Thereafter, they revised said costing when there are changes in raw material cost. That being the case, we find that the reliance placed by the appellant on the principle that time of removal is relevant and, hence, annual costing is not tenable, is unsustainable. The fact remains that while the duty liability has to be discharged at the time of removal of excisable goods in a situation where there is no sale transaction and known value, the deemed transaction value has to be constructed based on costing method which necessarily will involve an averaging of cost for a period, considering all the parameters. It is neither the case of the appellant nor there is such an approved standard for arriving at cost of excisable goods for each individual clearance. 7. Now, the question remains when at the time of each clearance of excisable goods for captive consumption the exact transaction value could not be arrived at the relevant time the duty has to be paid on a provisional basis and upon arriving at the costing applying CAS-4 and the assessable value in terms of Rule 8 of Valuation Rules final determination of duty liability has to be made. I....
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....In other words when CAS-4 based annual costing formed basis for arriving transaction value, the overall duty liability/short payment should be arrived at after considering duty already paid during that year on such goods. We find the reasoning given by the Original Authority against adjustment of already paid duty as untenable. Section 11B has no application in such situation, when the appellants duty liability is determined on annual CAS-4, the duty already paid during said period has to be adjusted. The question of unjust enrichment has no relevance here. There is no refund considered here. The point that the duty paid in excess in certain months has been availed as credit by sister unit hence, cannot be adjusted towards short payment also not tenable. The demand arose based on annual costing. Such cost price in terms of Rule 8 will apply to all clearances made during the relevant year. Admittedly, duty already discharged has to be considered for arriving at overall short payment. Selectively applying the said cost price only for months when the clearances were below such cost price is not legally sustainable." 8, 9, 10 .... ..... 11. In the case at hand, the Tr....
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....es to valuation of the impugned goods cleared from one factory of the appellants to another factory under the new Valuation Rules brought into effect from 1-7-2000. The appellants continued to clear the impugned goods as per the values determined under the old rules but under intimation to the department. Subsequently, they re-determined the value for the consignments cleared after 1-7-2000 and paid differential duty of Rs. 1,18,25,451/- the Cenvat credit of which they have taken at their recipient factory. Such payment was made before issue of any show cause notice and within six months of the clearance in respect of all the consignments. The fresh valuation done under the new rules has not been disputed by the department. He demand for Rs. 26,63,851/-, which is the subject matter of the impugned orders passed by the lower authorities, is attributable to the fact that in respect of some consignments the duty was paid on a higher value compared to the redetermined value and hence the appellants, according to the Department, should have asked for a refund claim instead of adjusting the same while paying the differential amount. In other words, it is the department's case that the ap....
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....t of duty is not permissible and the duty paid in excess need to be taken back by way of refund. The decision in the case of Sterlite Industries Limited (supra) is also on different facts as here some of the elements were not included while preparing CAS-4 certificate. We therefore, find that the facts in the cases relied upon by the department are on different footing and therefore are not applicable to the instant case. 5.5 We find that ICWAI in their revised guidelines issued in 2012, have also prescribed the periodicity of cost sheet/certification. It mentions: "The basic purpose of CAS-4 is to determine the cost of production for goods captively consumed and calculate deemed transaction value thereof. Therefore, valuation is required at the time of removal of the goods. If costing is for the future period, it will be done at projected costs, projected capacity utilisation. In such cases, valuation of opening and closing stock of WIP and finished stock is to be ignored. In case, when the normal capacity utilization is not quantifiable and/or actual capacity utilization is likely to be low, as compared to previous period; it is advisable that the manufacturer shall g....