Custom, Excise & Service Tax Tribunal
C.C.E. Delhi-Iv vs Sadhu Forging Ltd. (Unit-I) on 30 November, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL SCO 147-148, SECTOR 17-C, CHANDIGARH 160 017 COURT NO. I APPEAL NO. E/746/2008 [Arising out of Order-in-Appeal Nos. 157 & 158/CE/Appl/Dlh/IV/2007 dated 15.01.2008 passed by the Commissioner of Central Excise (Appeals), Delhi-I.] Date of hearing/decision: 30.11.2016 For approval and signature: Honble Mrs. Archana Wadhwa, Member (Judicial) Honble Mr. Devender Singh, Member (Technical) =======================================================
C.C.E. Delhi-IV :
Appellant(s) VS Sadhu Forging Ltd. (Unit-I) Sadhu Forging Ltd. (Unit-II) :
Respondent(s) ======================================================= Appearance:
Sh. G.M. Sharma, AR for the Appellant(s) Sh. N.L. Jahangir Advocate, for the Respondent(s) CORAM:
Honble Mrs. Archana Wadhwa, Member (Judicial) Honble Mr. Devender Singh, Member (Technical) FINAL ORDER NO. 61777/2016 Per : Devender Singh The Revenue is in appeal against the Order-in-Appeal Nos. 157 & 158/CE/Appl/Dlh/IV/2007 dated 15.01.2008 passed by the Commissioner of Central Excise (Appeals), Delhi-I.
2. The brief facts of the case are that the appellants are engaged in the manufacture of rough iron forging and M.V. Parts. It was observed that the appellants sold their finished goods during the year 2000-01 (from 1st July, 2000) to 2004-05 to their related parties i.e. M/s Sadhu Forging (Gear Division), and M/s Sandhu Overseas Ltd for their captive consumption and assessed the duty under Section 4(1) (a) of the Central Excise Act, 1944 on transaction value. Apart from clearing their goods to Gear Division and M/s Sadhu Overseas, they were selling their goods to other independent buyers such as M/s Maruti Udyog Ltd. etc. They also submitted the details of percentage of such goods sold to such independent buyers. The Revenue, however, felt that the goods should have been assessed under sub-section (b) of Section 4 of Central Excise Act, 1944 read with Rule 8 of the Central Excise Valuation Rules, 2000. Special Audit under Section 14 A of the Central Excise Act, 1944 for ascertaining the assessable value by undertaking the costing of the products in question as per norms laid down in CAS-4 was done. The audit was conducted by M/s V. Kumar & Associates, Cost Accountant and submitted a report dated 12.07.2005. On the basis of said report, two show cause notices both dated 29.07.2005 were issued to the appellants in which Central Excise duty of Rs. 14,62,857/- and Rs. 10,50,676/- for the period from July, 2000 to March, 2005 was demanded. The show cause notices also proposed recovery of interest and imposition of penalty on the appellants. The adjudicating authority confirmed the demands, interest and also imposed penalties equal to the Central Excise duty. In appeal, the Commissioner (Appeals) set aside the demands relying on the Tribunals judgment in the case of Ispat Industries Vs. CCE, Raigad 2007(209) ELT 185 (Tri.-LB). Aggrieved by the same, the Revenue has filed this appeal.
3. After hearing both the parties and examining the records, we find that the respondents were not clearing their entire production to the Gear Division of their own Company or to their sister concern M/s Sadhu Overseas. It is not disputed that the respondents were also selling the goods (more than 65% their production) to independent buyers such as M/s Maruti Udyog Ltd. etc. In this background, we find that the Commissioner (Appeals) has correctly applied the decision of the Larger Bench of the Honble Tribunal in the case of M/s Ispat Industries Vs. CCE, Raigad 2007 (209) ELT 185(Tri-LB), wherein the Honble Tribunal held as under:-
Para 9. In view of what we have observed above, we answer the reference in the following terms:
(a) The provisions of the Rule 8 of the Valuation rules will not apply in a case where some part of the production is cleared to independent buyers;
(b) The provision of rule 4 are in any case to be preferred over the provisions of Rule 8 not only for the reason that they occur first in the sequential order of the Valuation Rules but also for the reason that in a case where both the rules are applicable, the application of rule 4 will lead to a determination of value which will be more consistent and in accordance with the parent statutory provisions of Section 4 of the Central Excise Act, 1944.
4. In view of the above settled position of law, we find no infirmity in the order of the ld. Commissioner (Appeals) and the same is sustained.
5. The appeal filed by the Revenue is dismissed.
(Operative part pronounced in the Court) Archana Wadhwa Member (Judicial) Devender Singh Member (Technical) NS 2 E/746/2008- CHD