Custom, Excise & Service Tax Tribunal
M/S. Sicgil India Ltd vs Commissioner Of Central Excise, ... on 4 September, 2017
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
E/981 to 983/2005
(Arising out of Order-in-Appeal No. 75/2005 (M-I) dated 12.8.2005; Order-in-Appeal No. 79/2005 (M-I) dated 22.8.2005 and Order-in-Appeal No. 80/2005 (M-I) dated 23.8.2005 all passed by the Commissioner of Central Excise (Appeals), Chennai)
M/s. SICGIL India Ltd. Appellant
Vs.
Commissioner of Central Excise, Chennai I Respondent
Appearance Shri S. Muthuvenkataraman, Advocate for the Appellant Shri A. Cletus, Addl. Commissioner (AR) for the Respondent CORAM Honble Ms. Sulekha Beevi C.S., Member (Judicial) Honble Shri B. Ravichandran, Member (Technical) Date of Hearing / Decision: 04.09.2017 Final Order Nos. 41941-41943 / 2017 Per B. Ravichandran These three appeals are on identical issue regarding valuation of carbon-di-oxide manufactured and cleared by the appellants. The dispute mainly centers around the freight element to be added for the transportation of gases from the unit of the appellant. The second issue is relating to treatment of lorry containers used for transporting gases from the unit of the appellant as a packing material.
2. The ld. Counsel Shri S. Muthuvenkataraman for the appellant submitted that the proceedings before the lower authorities proceeded substantially on issues not agitated in the show cause notice. He specifically mentioned that proceedings in show-cause notice dated 18.10.2004 and 27.12.2004 merely discuss the issue regarding quantification of freight element by different method adopted by the appellant. In the first year of assessment 2001 02, the appellant claimed abatement of transportation charges based on actual distances. Thereafter, they claimed abatement based on weighted average. The Revenue objected to this saying that the kilometer shown for the same destination has wide variation. Accordingly, the abatement sought was disallowed.
3. On the second issue regarding the tanker on the lorries to be treated as packing material, the lower authorities held that the tanker lorries used for transportation of gases should be considered as packing material and the value equivalent to the depreciation claimed should be added for duty purposes.
4. The ld. Counsel reiterated the grounds of appeals and submitted that in the first two show cause notices, the lower authorities travelled beyond the scope of the notice. The third notice was hit by limitation. There were provisional assessments earlier and correspondences with the department regarding this valuation issue. The third notice issued on 2.11.2004 invoking extended period is barred by limitation. The notice prior to that one for finalization of provisional assessment issued on 18.10.2004 is on the same subject.
4. The ld. AR opposed the appeal and submitted that the gases cleared in containers should be valued by including the value of the containers as per the standard practice. The container on the lorry should be considered nothing but a bigger cylinder and accordingly the proportionate value has to be added for duty purposes.
5. Heard both sides and perused the appeal records.
6. On the first issue regarding the container permanently mounted on the lorry for transportation of gases to be considered as packing material, we are not convinced by the reasoning adopted by the lower authorities. The gas tanker mounted on the lorry is part of a transport vehicle and cannot be considered as a packing material. The same is neither factually or legally tenable. Regarding transport of gases through smaller cylinders, ld. counsel conceded that the value has to be as per the proposal made by the department.
7. Regarding the transport charges added in the assessable value, we note that though the appellant claimed that for later period they were adopting weighted average, the ld. counsel admitted that this can be subjected to verification and on production of support evidence, abatement as eligible as per the valuation provisions can be allowed to them. We direct that such verification can be done by the jurisdictional authorities.
8. Regarding the third show cause notice, we find that earlier two show cause notices were issued for finalization of provisional assessment on the same issue. Accordingly, the third notice cannot be issued invoking extended period. As such, the third notice will be restricted to the demand period within normal period of limitation, if any.
9. In view of the above discussions and analysis, the appeals are partly allowed except with reference to gases transported in smaller cylinders as well as freight to be ascertained on actual basis or on weighted average based on the supporting evidence.
(Order dictated in open court)
(B. Ravichandran) (Sulekha Beevi C.S.)
Member (Technical) Member (Judicial)
Rex
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