Custom, Excise & Service Tax Tribunal
M/S. Savita Chemicals Ltd vs Commissioner Of Central Excise, ... on 18 August, 2011
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
COURT NO.II
APPEAL NO. E/422/09
(Arising out of Order-in- Appeal No.AH/87 &88/BEL/2009 dtd.27.2.09 passed by the Commissioner of Central Excise (Appeals), Mumbai.II )
For approval and signature:
Honble Mr Ashok Jindal, Member(Judicial)
Honble Mr. Sahab Singh, Member(Technical)
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1. Whether Press Reporters may be allowed to see : No
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the :
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : seen
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
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M/s. Savita Chemicals Ltd.
:
Appellant
VS
Commissioner of Central Excise, Belapur
Respondent
Appearance
Shri Mehul Jivani,advocate with Shri Vinod Awtani,advocate for Appellant Shri V.K.Singh, SDR for Respondent CORAM:
Mr. Ashok Jindal, Member(Judicial) Mr.Sahab Singh, Member(Technical) Date of hearing: 18/08/11 Date of decision 18/08/11 ORDER NO.
Per : Sahab Singh This is an appeal filed by the appellants against the order of the Commissioner (Appeals) dated 27.2.2009.
2. The brief facts of the case are that the appellants had cleared the goods to M/s. Savita Polymers, Mahad/Silvassa, who were related persons as per the definition of Section 4(3)(b)(i) of the Central Excise Act, 1944. It was alleged by the department that they had not followed the cost construction method for valuation of the goods cleared to related person without payment of appropriate duty. Relying on the CAS 4 certificates given by the assessee, a demand of Rs. 8,99,223/- for the period 1.7.2000 to 31.3.2006 was confirmed by the adjudicating authority and equal amount of penalty was also imposed under Sec. 11AC of the Central Excise Act read with Rule 25 of the Central Excise Rules, 2002. The assessee filed an appeal before the Commissioner(Appeals) against the order passed by the adjudicating authority and the Commissioner (Appeals) vide his Order No. SRK/394/Bel/2007 dated 19.10.2007 remanded the case back to the original authority with direction to examine the reasons furnished by the appellants for variation in the cost of production as shown in CAS 4 furnished by them. The adjudicating authority after examining the submissions made by the appellants confirmed the demand of Rs. 8,99,223/- with interest and imposed penalty of Rs. 2,50,000/- under Sec.11AC of the Central Excise Act read with Rule 25 of the Central Excise Rules. Against the said Order-in-Original, the assessee filed an appeal before the Commissioner of Central Excise(Appeals). The Revenue has also filed an appeal against the impugned order on the ground that the adjudicating authority has erred in not imposing equal penalty under Sec.11AC of the Central Excise Act. The Commissioner(Appeals) vide the impugned order has upheld the confirmation of demand amounting to Rs. 8,99,233/- and enhanced the penalty to Rs. 8,99,233/- from Rs. 2,50,000/-. The assessee is in appeal before us against the said impugned order.
3. The ld.advocate appearing for the appellants submitted that the issue involved in this case is whether the goods supplied to M/s. Savita Polymers Ltd. can be assessed on the basis of CAS 4 treating them as related persons under the Valuation Rules, 2000. He submitted that neither the Commissioner (Appeals) vide his order dated 19.10.2007 nor the Asstt.Commissioner in his Order-in-Original passed on 21.07.2008 has given any finding on the relationship between the appellants and M/s. Savita Polymers Ltd. and the Commissioner(Appeals) under the impugned order has also not given any finding on the fact that M/s. Savita Polymers ltd, and the appellants are related persons. He further submitted that the Order-in-Original dated 21.7.2008 which was passed after the remand direction of the Commissioner (Appeals) given in Order-in-Appeal dated 19.10.2007 was not in compliance with the direction inasmuch as no quantification of demand can be done without going to the issue of related persons between the two firms. He also mentioned that the Revenues appeal against the Order-in-Original for enhancing the penalty is bad in law and it was not justified for the Commissioner(Appeals) to enhance the penalty equal to duty amount. The ld.counsel also submitted copy of Order-in-Appeal No.PKS/299/BVEL/2010 dated 17.5.2010 wherein the Commissioner (Appeals) had held that M/s. Savita Polymers Ltd. and M/s. Savita Chemicals Ltd. cannot be considered as related and the department has not filed any appeal against this Order-in-Appeal. He further prayed that since M/s. Savita Polymers Ltd. and the appellants are not related, the impugned Order-in-Appeal is not sustainable.
4. The ld.SDR appearing on behalf of the Revenue reiterated the findings of the lower authority and submitted that when the first Order-in-Appeal dated 19.10.2007 passed by the Commissioner (Appeals) remanding the matter back to the original authority for quantification, the appellants have not filed any appeal against that Order-in-Appeal. At this stage, they cannot take a plea that the Commissioner(Appeals) in that order has not given any finding on the issue of related persons. He, therefore, requested that the appeal filed by the appellants may be dismissed.
5. After hearing both sides, we find that the issue involved in this case is whether the appellants and M/s. Savita Polymers are related persons and if they are related, then the assessment can be done under the Valuation Rules on the basis of costing data submitted by the appellants. We find that in the first Order-in-Appeal of 2007, the matter was remanded back to the original authority with certain directions for quantification of duty after considering reasons submitted by the appellants for variation in the costing data. Then the original authority had passed the order confirming the duty demand as well as imposing the penalty on them and it was observed by the original authority that the appellants had accepted the Order-in-Original on merits and he has not given any further finding on the matter. The Commissioner (Appeals) in the impugned order has also not gone into the merits of the case as contended by the appellants on the ground that the lower authority has examined the matter to the extent of submissions made by them as per direction contained in the first Order-in-Appeal. Neither the original authority nor the Commissioner(Appeals) in the impugned order has discussed the merits of the case. On the other hand, the Order-in-Appeal No.PKS/299/BVEL/2010 dated 17.5.2010 had clearly held that M/s. Savita Polymers Ltd. and the appellants cannot be treated as related persons and value is to be determined under Sec.4 of the Valuation Rules. We, therefore, find that it is a fit case for remand to the original authority for deciding the matter afresh after giving a reasonable opportunity of being heard to the appellants. We are not expressing any opinion on merits. It is an open remand.
6. The appeal is allowed by way of remand.
(Pronounced in court) Ashok Jindal Member(Judicial) Sahab Singh Member(Technical) pv 6