Custom, Excise & Service Tax Tribunal
Asian Paints Ltd. vs Cce Belapur on 12 October, 2018
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
COURT NO.2
APPEAL No.E/911 & 1667/2010
(Arising out of Order-in-Appeal No.SB/36/LTU/MUM/2010 dated
11/02/2010 passed by the Commissioner of Central Excise & Service
Tax (Appeals), LTU, Mumbai)
Asian Paints Ltd., : Appellant
Padmaja Laboratories
VS
Commissioner of Excise, Belapur : Respondent
Appearance Shri.Rajmohan, manager (Taxation) for Appellant Shri.A.B. Kulgod, Asst. Comm. (AR) & Shri S Hasija, Supdt. (AR) for respondent CORAM:
Hon'ble Mrs.Archana Wadhwa, Member (Judicial) Hon'ble Shri Sanjiv Srivastava, Member (Technical) Date of hearing : 12/10/2018 Date of decision : 12/10/2018 ORDER NO.87799-87800/2018 Per : Mrs.Archana Wadhwa
1. Both the appeals are being disposed off by a common order, as they arise out of the same impugned order passed by the authorities below, vide which demand of duty of Rs.2,03,421/- and Rs.43,684/-
stands confirmed against M/s.Padmaja Laboratories under Section 11A(2) of the Act, along with imposition of penalty, under Section 11AC of the Act. Further, penalty of Rs.20,000/- stands imposed upon M/s.Asian Paints Ltd.
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2. As per facts on record M/s.Padmaja Laboratories is doing job work of M/s.Asian Paints Ltd., out of raw-materials sent by M/s.Asian Paints Ltd. The goods manufactured by M/s.Padmaja Laboratories are being cleared by them on payment of duty, by adopting the assessable value based upon the principle adopted by the Hon'ble Supreme Court in the case of Ujagar Prints, i.e., by adopting the cost of raw-materials plus manufacturing cost plus the job work charges, including profit margin. The cost of the final product was being arrived at by adopting the total cost and adding the margin profit of 10%.
Inasmuch as the actual cost of the raw-material was not verified at the time of sending the goods by M/s.Asian Paints Ltd., such cost was being adopted on the basis of previous year's balance sheet. Revenue was of the view that there was escalation of the raw- materials subsequently and such escalated cost should have been taken into consideration. Accordingly, Revenue initiated proceedings against them by way of issuance of two show-cause notices, one by invoking longer period and the other within the normal period of limitation. During the course of adjudication, the appellant brought to the notice of the Assistant Commissioner that subsequent to the clearance of the goods, they have re-calculated the cost of their final product based upon the escalation and has paid the differential duty. However, the adjudicating authority observed that since the assessment was not provisional, such subsequent payment of additional duty cannot be taken into consideration. Accordingly, by adopting the provisions of Rule 8 of Central Excise Valuation 3 Appeal No.E/911 & 1667/2010 (Determination of Prices of Excisable Goods) Rules, 2000, the value was enhanced and differential duty was confirmed.
3. Apart from the fact that the appellant had already discharged the additional differential duty as also the fact that the duty paid by the assessee was being availed as credit by M/s.Asian Paints Ltd., thus leading to a revenue neutral situation, we note that the legal issue also sands decided by the Hon'ble Supreme Court in favour of the assessee, in the case of CCE, Pune Vs. Mahindra Ugine Steel Ltd., reported in 2015 (318) ELT 592 (SC). It was held that the provisions of Rule 8 of Central Excise Valuation (Determination of Prices of Excisable Goods) Rules, 2000, is not applicable to the valuation required to be done in respect of the goods manufactured under job works. One such reference can also be made to the Tribunal decision in the case of Rolastar Vs. CCE, Daman, reported in 2012 (276) ELT 87 (Tri-Ahmd).
4. Inasmuch as the legal issue stands decided in favour of the assessee, we find no reason to uphold the impugned order. As such, the same is set aside and both the appeals are allowed with consequential relief, if any.
(Pronounced and dictated in Court)
(Sanjiv Srivastava) (Archana Wadhwa)
Member (Technical) Member (Judicial)
PJ
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Appeal No.E/911 & 1667/2010