Custom, Excise & Service Tax Tribunal
M/ Binani Cement Ltd vs Cce, Jaipur on 7 October, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. Principal Bench, New Delhi COURT NO. III DATE OF HEARING : 30/09/2016. DATE OF DECISION : 07/10/2016. Excise Appeal No. 1774 of 2009 [Arising out of the Order-in-Original No. 1/2009/CE/JP-II/ Commissioner dated 29/01/2009 passed by Commissioner, Central Excise, Jaipur.] For Approval and signature : Honble Shri S.K. Mohanty, Member (Judicial) Honble Shri B. Ravichandran, Member (Technical) 1. Whether Press Reporters may be allowed to see : the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it would 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 of the order? 4. Whether order is to be circulated to the : Department Authorities? M/ Binani Cement Ltd. Appellant Versus CCE, Jaipur Respondent
Appearance Shri Amit Jain, Advocate for the appellant.
Shri Yogesh Agarwal, Authorized Representative (DR) for the Respondent.
CORAM: Honble Shri S.K. Mohanty, Member (Judicial) Honble Shri B. Ravichandran, Member (Technical) Final Order No. 54067/2016 Dated : 07/10/2016 Per. B. Ravichandran :-
The appeal is against order dated 29/1/2009 of Commissioner of Central Excise, Jaipur II. The appellant are engaged in the manufacture of cement and clinker liable to Central Excise duty. They were clearing cement in 50 kg. bags on contracted price to various contractors, builders, factories etc. They were discharging Central Excise duty in terms of Sl. No. 1A of Notification No. 4/2006-CE dated 01/3/2006 on such clearances. The cement bags were marked with contractual price as RSP. The Revenue, by entertaining a view that the appellants have not discharged Central Excise duty liability correctly, initiated proceedings against them to demand an amount of Rs. 1,29,53,203/-. The case was adjudicated and by the impugned order. The Original Authority confirmed a demand of Rs. 76,06,585/- and also imposed a penalty of Rs. 1,00,000/- on the appellant. The dispute involved in the present appeal is relating to RSP adopted by the appellant for contracted sales which is not truly reflecting the retail sale price as defined in the notification. The RSP did not include dealers commission, local taxes (octoroi) and unloading charges etc.
2. We have heard both the sides and perused the appeal records. The Original Authority held that the sales effected on contract basis affixing contract price as RSP cannot be considered for concessional duty in terms of Sl. No. 1A of the above said notification. The RSP should include all taxes local or otherwise, freight, transport charges, commission payable to dealers packing, delivery etc. and the price should be the sole consideration for the sale. It was held that the sale in the present case was FOR destination basis, but the confirmatory order note clearly mentions that unloading and octoroi charges were to be borne by the buyers. The Original Authority concluded that since the RSP printed on the cement cleared for contract sale did not include octoroi up to the point of sale, it cannot be treated as RSP in terms of the said notification. It was concluded that the RSP printed on the cement bags based on which duty was paid was not falling within the definition given in the said notification for paying duty. We find that the Original Authority is correct in arriving at such conclusion as the contract price does not include the octoroi, commission to the dealers and other elements which will necessarily have to form part of the RSP as per the definition given in the notification. The RSP on the basis of such contract price is not the RSP as defined in the notification. Accordingly, the concessional duty as applicable under Sl. No. 1A is not available to the appellant.
3. However, after arriving at the above conclusion, the Original Authority also categorically held that the proposal in the show cause notice to demand and recovery duty on cement based on tariff rate is not correct. He proceed to determine the RSP based on prevalent RSP for the destination of impugned cement cleared on contractual price. The appellants contested such findings by the Original Authority on the ground that the same is beyond the scope of show cause notice. We find that the Original Authority is in error on two counts :-
(a) apparently such fixation of RSP is beyond the scope proposed in the show cause notice and
(b) the RSP cannot be derivatively fixed by an excise officer. The same should be printed on the package of excisable goods. Such RSP cannot be arrived at by applying calculation or by comparison with similar RSP.
Accordingly, we find no legal basis for such action.
4. During the proceedings before the Original Authority the appellants pleaded for concession under Sl. No. 1C of the said notification on the ground that the contractual buyers are all falling under the category of industrial and institutional consumers. We find that the Original Authority did not examine the full scope alongwith settled case law to determine the correctness of appellants claim for sale to institutional or industrial buyers. The factual position cannot be decided based on statement of officials of the appellant. We also note that due consideration has not been given to the appellants plea on the statutory definition of retail sale under Rule 2 (q) of the PC Rules. Even otherwise, the various decided cases have examined the scope of institutional and industrial consumers. Reference can be made to decisions of the Tribunal in :
(i) Heidelberg Cement (India) Ltd. vs. CCE reported in 2015 (315) E.L.T. 53 (Tri. Mum.) ; and
(ii) Ultratech Cement Ltd. vs. CCE reported in 2015 (317) E.L.T. 505 (Tri. Del.).
We find the Original Authority did not record any reason to reject the claim of the appellants for concession under Sl. No. 1C of the above-mentioned notification.
5. In view of the above discussion and analysis, we find it fit and proper to set aside the impugned order and to remand the matter to the Original Authority to decide the case afresh on all issues. The appellant shall be given adequate opportunity to present their case. The appeal is allowed by way of remand.
(Order pronounced in the open court on 07/10/2016 .) (S.K. Mohanty) Member (Judicial) (B. Ravichandran) Member (Technical) PK ??
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