TaxTMI 
TaxTMI 
2026 (5) TMI 866
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....t Limited (herein after referred as GPIL) at a lower price than the price at which the same goods were sold by the appellant to independent buyers. Accordingly, the audit raised an objection regarding undervaluation of the said goods, since the department was of the opinion that the appellant had not followed the provisions of Rule 9 of the Valuation Rules, 2000 for the purpose of the clearance of the said goods to 'related person' GPIL. Further, the audit has also raised the objection regarding availment of Cenvat Credit of Rs. 52,842/- which had been taken after six months/one year from the date of invoice. 2.1. Accordingly, a show cause notice was issued to the appellant demanding Central Excise duty and recovery of irregularly availed Cenvat Credit. On adjudication, the demand of duty and recovery of irregularly availed Cenvat credit proposed in the show cause notice were confirmed along with equal penalty under Section 11AC of the Central Excise Act. Penalty under Rule 15(2) of the Cenvat Credit Rules was also confirmed along with interest and equal amount of penalty on the appellant. On appeal, the Ld. Commissioner (Appeals) upheld the demands confirmed by the adjudicating....
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....f 'misrolls' which are totally different from 'end cuttings'. Thus, the appellant submits that the price adopted by the Ld. Adjudicating authority to demand central excise has no basis and hence not sustainable. 3.2. The appellant further submits that the entire issue is 'revenue neutral' in situation as whatever duty paid by one unit is available as Cenvat Credit to the other unit. Thus, the appellant submits that the demand confirmed is not sustainable on account of 'revenue neutrality' also. 3.3. The appellant further submits that the show cause notice has wrongly invoked the extended period of limitation. In the present case, the demand has been issued for the period from April 2014 to March 2017 whereas the show cause notice was issued on 18.12.2018 alleging suppression. The appellant submits that audit has been conducted on the records of the appellant and the facts of clearances made to GPIL were already declared in the returns filed by them. Thus, the appellant submits that the department was aware of the clearance of goods to GPIL. Accordingly, the appellant submits that invocation of extended period of limitation is not sustainable. In support of this contention, th....
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....n the credit beyond the prescribed period of six months/one year from the date of invoice and hence the same was rightly disallowed. 5. Heard both sides and perused the documents. 6. We find that the issue involved in this case is regarding recovery of central excise duty on account of undervaluation of goods. The allegation of the Department is that the appellant had cleared scrap (end cuttings) to the related party GPIL at a lower price than the price at which the same goods were sold by the appellant to independent buyers. In this regard, we find that the appellant's unit was amalgamated with M/s GPIL by the order of the Chhattisgarh High Court dated 03.02.2011. We also find that the appellant and GPIL share the same PAN and Corporate Identification Number. Thus, we find that the appellant and GPIL are the same legal entity post amalgamation. Hence, we are of the view that the transaction between both the units is not a "sale" under Section 2(h) of the Central Excise Act, as there are not two legal persons existed as per Section 3(42) of the General Clauses Act, 1897 for a 'sale' to happen. As both the units share the same PAN and Corporate Identification Number and there ....
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....ndustries Ltd. to their other units at Taloja, Kamothe and Kalmeshwar were not captively consumed, but in the facts of the case before us, the case of the appellant was that of clearing goods to their own units for further manufacturing processes and these goods cleared by the appellant were captively consumed by their own units located in other places. Therefore, the decision in the case of Ispat Industries Ltd. (supra) is also clearly not applicable to the facts of this case. 9.2. We find that the case of the appellant is squarely covered by the decision in the case of OCL India Ltd. v. Commissioner of Central Tax, G.S.T. & C.E., Rourkela rendered vide Final Order No. 76670 of 2024 dated 26.06.2024 in Excise Appeal No. 76300 of 2018 [2024 (6) TMI 1463-CESTAT, Kolkata). wherein the facts of the case were as under: - "2. The facts of the case are that the appellant is engaged in manufacture of clinker cement. Clinker is the intermediate product to manufacture cement. The appellant has two other unit at Kapilas Cement Works, Cuttack in the State of Odisha and Bengal Cement Works at Medinapore,in the state of West Bengal which are engaged in manufacture of cement. F....
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....be adopted for applying Rule 8. The Board has interacted with the institute of Cost & Works Accountants of India (ICWA)) for developing costing standards for costing of captively consumed goods. 2. The Institute of Cost & Works Accountants of India (ICWAI) has since developed the Cost Accounting Standards, CAS 2, 3 and 4, on capacity determination overheads & cost of production for captive consumption, respectively, which were released by the Chairman CBEC on 23-1-2003 3. It is, therefore, clarified that cost of production of captively consumed goods will henceforth be done strictly in accordance with CAS-4 Copies of CAS-4 may be obtained from the local Chapter of ICWAL 4. Board's Circular No. 258/92/96-CX, dated 30-10-96 [1996 (88) ELT T9), may be deemed to be modified accordingly so far as it relates to determination of cost of production for captively consumed goods. 5. This Circular may be brought to the notice of the field formations 6. Suitable Trade Notices may be issued for the benefit of the Trade 7. Hindi version will follow. 8. Receipt of these instructions may be acknowledged." In view of the ab....
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....orrect and the matter should be settled according to "general principles" developed by an authority competent to lay down standards. Tribunal and Courts are duty bound to consider such a contention. This position enunciated in the judgment of the High Court of Calcutta in the case of Birla Jute and industries Ltd. v. Assistant Collector-1992 (57) ELT. 674 has been approved by the Apex Court in the case of Eswaran & Sons Engineers Ltd 6. We may also note that the judgment of the Apex Court in the case of Eswaran & Sons Engineers Ltd. does not support the revenue's contention that assessments for each period should be decided in terms of the Circular of the relevant period without considering the modifications subsequently made in them. The issue considered in the Eswaran & Sons Engineers Ltd. judgment war altogether different. It was as to what was the effect of a subsequent circular on a demand which had been raised prior to the issue of a circular. The Court observed as under. "13. Under Section 378 of the Act, the Board is empowered to issue instructions to Central Excise Officers, for the purpose of uniformity in the classification of excisable goods, which....
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.... when, as noted already, it is well settled that assessees are not bound by any circular, though at liberty to seek the benefit of circulars and a Court has to allow such a claim while Revenue is bound by its own circulars 7. In view of what is stated above, all the appeals are allowed by way of remand with the direction to the original authorities to decide valuation in terms of the Circular No. 692/8/2003, dated 13-2-2003." The said order of this Tribunal was affirmed by the Hon'ble Apex Court in 2016. 9. The Revenue sought to distinguish the decision of their own case for the earlier period on the ground that in the case of Ispat Industries (supra), the Larger Bench of this Tribunal held that the assessable goods transferred to another plant of the same assesse is required to determine the value as per Rule 4 of the Valuation Rules as the goods were sold to the independent buyers also. 10. We find that said decision is distinguishable on the facts of the case, as in that case, the goods were cleared to another plant not for captive consumption whereas in the case in hand, the goods in question have been cleared to their sister unit for captive cons....
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....r applied by the authorities. Thus, we hold that the demand of central excise duty confirmed in the impugned order is not sustainable and hence we set aside the same. As the demand of duty is not sustained, the question of demanding interest or imposing penalty does not arise. 6.3. The appellant also raised the issue of revenue neutrality. Admittedly, in the present case, we find that the appellant had cleared the goods from one unit to their another for further manufacture. Thus, we find that the duty paid by one unit would be available as Cenvat Credit to the other unit. Thus, we observe that the 'revenue neutral' situation existed in this case. In such a revenue neutral situation, the demand of central excise duty confirmed is not sustainable. We find that this view is supported by the decision in the case Britco Foods Company Ltd. vs. Commissioner of C.Ex., Pune [2001 (127) E.L.T. 73 (Tri.-Mumbai)] which was affirmed by the Hon'ble Supreme Court reported in 2007 (213) E.L.T. 490 (S.C.). Thus, we find that the demand of central excise duty confirmed is not sustainable on account of revenue neutrality also. 6.4. The appellant also raised the issue of limitation and contende....