Custom, Excise & Service Tax Tribunal
M/S U.P. Filament (India) vs Cce, Ghaziabad on 1 August, 2014
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 : 01/08/2014. DATE OF DECISION : 01/08/2014. Excise Appeal No. 2714 of 2005 [Arising out of the Order-in-Appeal No. 66/CE/GZB/2005 dated 18/05/2005 passed by The Commissioner of Customs & Central Excise (Appeals), Ghaziabad.] For Approval and signature : Honble Ms. Archana Wadhwa, Member (Judicial) Honble Shri Rakesh Kumar, 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/s U.P. Filament (India) Appellant Versus CCE, Ghaziabad Respondent
Appearance Shri S.K. Pahwa, Advocate for the appellant.
Shri Yashpal Sharma, Authorized Representative (DR) for the Respondent.
CORAM : Honble Ms. Archana Wadhwa, Member (Judicial) Honble Shri Rakesh Kumar, Member (Technical) Final Order No. 53134/2014 Dated : 01/08/2014 Per. Archana Wadhwa :-
The appellant is engaged in the manufacture of Poly Propylene Multi Filament Yarn as also in the manufacture of Narrow Woven Fabric. A part of the Poly Propylene Multi Filament Yarn was being sold by them to independent wholesale buyers and a substantial quantity of the same was being used captively for further manufacture of Narrow Woven Fabrics.
2. Till April 1999 the Narrow Woven Fabrics were being cleared by the appellant on payment of duty by adopting the classification of the same as 5806.39. As such, the Poly Propylene Multi Filament Yarn, which was being used captively, was not liable to pay duty in terms of Notification No. 22/96-CE dated 23/07/1996.
3. Subsequently the appellants classification list in respect of Narrow Woven Fabrics was revised and the goods were held to be classifiable under 5806.32, which attracted exemption in terms of Notification 5/99-CE dated 28/2/1999. With the clearance of Narrow Woven Fabrics without payment of duty, the yarn which was consumed captively, became liable to duty of excise. Accordingly, the appellants started paying duty on the yarn, by adopting the assessable value on which they were selling the same to the other independent buyers.
4. The dispute in the present appeal relates to the valuation of the Poly Propylene Multi Filament Yarn, consumed captively in the manufacture of Narrow Woven Fabrics. Revenue entertained a view that the said yarn should be assessed to duty in terms of provisions of Rule 8 of the Central Excise (Valuation) Rules, which provided the 110% of the cost of manufacture. The appellants stand is that in as much as they are also selling the yarn to the other independent buyers, and there is no dispute about the value adopted for payment of duty in such cases, the same assessable value should be adopted for the purpose of captively consumed yarn.
5. The lower authorities did not agree with the appellants contention and after initiation of proceedings, confirmed the differential duty of Rs. 4,55,412/- alongwith penalty of identical amount.
6. We find that the issue is no more res-integra stand settled by the Larger Bench decision of the Tribunal in the case of Ispat Industries Ltd. vs. CCE, Raigad reported in 2007 (209) E.L.T. 185 (Tri. - LB). It stands declared that the provisions of Rule 8 of Central Excise (Valuation) Rules, 2000 would be applicable only when the entire production of a particular commodity is captively consumed. Where a part of the goods are also being sold to independent buyers, the value at which the same are being sold has to be adopted as the assessable value for payment of duty on the captively consumed items.
7. By following the above decision, we set aside the impugned order and allow the appeal with consequential relief to the appellant.
(Dictated and pronounced in open court) (Archana Wadhwa) Member (Judicial) (Rakesh Kumar) Member (Technical) PK ??
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