Custom, Excise & Service Tax Tribunal
M/S Castrol India Ltd vs Commissioner Of Central Excise, ... on 14 June, 2011
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT AHMEDABAD COURT NO. II Appeal No. E/682/04 (Arising out of Order-in-Appeal No. 375/2003 dated 27.11.2003 passed by the Commissioner of Central Excise (Appeals), Bangalore-I). For approval and signature: Honble Shri Ashok Jindal, Member (Judicial) Honble Shri Mathew John, Member (Technical ======================================================
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 : Yes 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? ====================================================== M/s Castrol India Ltd. Appellant Vs. Commissioner of Central Excise, Bangalore-I Respondent Appearance: Shri Haren Gandhi, Manager Indirect- Taxation for Appellant Shri Kishori Lal, SDR for Respondent CORAM: SHRI ASHOK JINDAL, MEMBER (JUDICIAL) SHRI MATHEW JOHN, MEMBER (TECHNICAL) Date of Hearing: 14.06.2011 Date of Decision: 14.06.2011 ORDER NO. WZB/MUM/2011 Per: Ashok Jindal
M/s Castrol India Ltd. has filed this appeal against the impugned order demanding differential duty on goods captively consumed by them on the ground of undervaluation of such captively consumed goods. The brief facts of the case are that the appellants were manufacturers of Lubricating Oil. Intermediate products like Gum Rosin Concentrate, Dorf 5300 and XLM 12.7% etc. were being also manufactured which were being captively consumed for manufacturing of final products. While clearing these items for captive consumption, they added only a notional profit of 10% to the cost. But the department, relying on the Boards Circular No. 258/92/96-CX dated 30.10.19996, is of the view that profit element based on the percentage of profit for previous year is to be added. Therefore, a show-cause notice was issued to the appellants for demand of differential duty. Both the lower authorities have confirmed the demand of differential duty. The period involved in this case is January, 1996 to January, 2000. Aggrieved by the said order, the appellants are in appeal before us.
2. Shri Haren Gandhi, Manager Indirect-Taxation of the appellant company appeared before us and submitted that for the period January, 1992 to December, 1995, a show-cause notice was issued to them on the identical issue of undervaluation of their captively consumed goods and vide Order No. 2012 & 2013 of 2005 dated 6.10.2005, the Bangalore Bench of this Tribunal has held that addition of notional profit of 10% is good enough. Therefore, the decision of the Tribunal in the appellants own case for the earlier period on the same issue is to be followed. He also submitted that they have not received any notice or any information that the department has filed any appeal against that order. As the said order was passed in the year 2005, the decision has attained finality. He further relied on the decision of the apex Court in the case of Commissioner of Central Excise, Chennai-I Vs. ITC Ltd. reported in 2006 (204) ELT 363 (SC). Therefore, he submitted that the impugned order be set aside and appeal be allowed. He also brought to our knowledge that the appellants have paid differential duty and passed on the credit to their sister unit, which has taken the credit of the same. So at this stage they are not contesting the duty levied but are contesting that no interest may be demanded.
3. On the other hand, Shri Kishori Lal, learned SDR submitted that the appellants are liable to adopt the method given by the Boards Circular dated 30.10.1996 and to pay duty on this captively consumed goods by adding profit element based on profit for previous year. As they have not followed the method, the lower authorities have rightly confirmed the demand against the appellants. In this situation, the appeal deserves dismissal.
4. After hearing the contentions of both the sides, we find that the short issue involved in this case is what should be the method of valuation of goods captively consumed. Whether it is to be arrived at by adding notional profit of 10% or by adding the percentage of profit of the final products as reflected in the previous year?
5. This issue has been settled by the Bangalore Bench of this Tribunal in the appellants own case for the previous period, wherein it was held that notional profit of 10% is good enough. Therefore, following the decision of coordinate Bench, in this case also, we hold that the appellants had correctly valued their captively consumed goods. We note that the appellants have already paid differential duty as demanded by the department and credit has been taken at the recipients end and in the facts and circumstances of the case, we do not find any need to interfere with the actions already done except that no further adverse consequences like interest shall follow based on the impugned order.
6. The appeal is disposed of accordingly.
(Dictated and pronounced in Court)
(Mathew John) Ashok Jindal)
Member (Technical) Member (Judicial)
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