Custom, Excise & Service Tax Tribunal
Hindalco Industries Ltd vs Commissioner Of Central Excise, Navi ... on 24 August, 2015
IN THE CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
Appeal No.
E/1659/05
- Mum
(Arising out Order-in-Appeal No. 19-20/COMMR(AH)/05 dated 23.02.2005 passed by the Commissioner of Central Excise, Navi Mumbai)
For approval and signature:
Honble Mr. P.K. Jain, Member (Technical)
Honble Mr. S. S. Garg, Member (Judicial)
1.
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
:
No
2.
Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
:
Yes
3.
Whether Their Lordships wish to see the fair copy of the Order?
:
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
:
Yes
Hindalco Industries Ltd.
Appellant
Vs.
Commissioner of Central Excise, Navi Mumbai
Respondent
Appearance:
Shri Rajesh Ostwal, Advocate for the appellant Shri N.K. Shastri, AC (AR) for the respondent CORAM:
Honble Mr. P.K. Jain, Member (Technical) Honble Mr. S. S. Garg, Member (Judicial) Date of hearing : 24.08.2015 Date of decision : 24.08.2015 O R D E R No:..
Per: P.K. Jain:
The brief facts of the case are that the appellant is engaged in the manufacture of various aluminium products. During the course of such manufacture, waste and scrap of aluminium arises. Appellant is selling it to various customers as also transferring to their own unit located in Taloja in Mumbai. For the waste and scrap being sold to various customers they are paying duty on the sale price. In respect of the goods cleared to their own unit in Taloja they are adopting the same price and paying duty. The unit was audited by excise officials wherein it was alleged that they are not including the cost of loading/handling charges and insurance at the rate of 8% (under the Employees State Insurance Scheme) incurred on the sale of such scrap. For this purpose revenue estimated that the expenditure would be `1300/MT and therefore, they demanded duty by adding the said amount in the quantity of scrap cleared to independent buyers. As far as the clearance to their own unit in Taloja is concerned, they took an amount of `2000/MT as such clearances involved in addition to the earlier factor, the transportation of the waste and scrap.
2. The case was adjudicated and the demand was confirmed by the original authority in the impugned order wherein he imposed equivalent amount of penalty under Section 11AC read with 173Q/ Rule 27 of the Central Excise Act, 1944/2001-2002 and also interest. Aggrieved by the said order, appellants are before us. It is to be noted that the period involved is prior to 01.07.2000 as also post 01.07.2000 and in the first show-cause notice extended period has also been invoked. The first show-cause notice is for the period January 1998 to January 2002 and second one from February 2002 to January 2003.
3. Ld. counsel for the appellant submitted that as far as the sale of the scrap is concerned they have not recovered any amount over and above the sale price, and as per their contract for sale it was the duty of the appellant customer to load the scrap in the truck and thereafter transport at their expenditure. In view of this position, the invoice indicated the correct assessable value. He further submitted that they did not understand how the figure of `1300 per MT as been arrived by the revenue. There is no question of adding 8% insurance charges under the Employees State Insurance Scheme. It was submitted that the ESIS has nothing to do with the insurance of the goods and moreover loading of the goods was the duty of the buyer as they have sold the goods on as is where is basis. As far as transferring the goods to their own unit in Taloja is concerned that they have paid the duty on the same value at which they have sold similar goods to other independent buyers/customers. He further submitted that basis to take either `1300/MT or `2000/MT is not elaborated in the show-cause notice and it has been taken arbitrarily. He further submitted that right from the initial reply to audit and to the show-cause notice, they have been taking the stand and the demand is totally incorrect and not sustainable. It was also submitted that first show-cause notice was issued invoking the extended period of limitation without any justification. It was also submitted that for the period prior to 1.7.2000 the issue of whether the loading charges can be included or not was finally resolved by the Larger Bench in the case of Supreme Petrochem Ltd. 2009 (240) ELT 38 (LB). The very fact, issue was referred to Larger Bench, there were differing views and hence, extended period of limitation cannot be invoked.
4. Ld. AR reiterated the impugned order.
5. We have considered the rival submissions. We note that issue is settled by the Larger Bench of this Tribunal in the case of Supreme Petrochem Ltd. (supra). We have also gone through the show-cause notice as also a copy of the audit objection/ audit memo. From these documents we are unable to understand the basis of taking an amount of `1300/MT over and above the invoice price. While the expenditure incurred on loading of the goods may be included in the assessable value but anything beyond that would not be includable for pre 01.07.2000. In the present case, we find that the barring 2-3 vouchers wherever a paltry sum of few hundreds rupees for certain labours, there is no evidence whatsoever for an expenditure of `1300/MT. We are unable to appreciate how a contribution @ 8% which is under Employees State Insurance Scheme will be includable in the assessable value. Similarly, in respect of their own transfer it is not clear how a figure of `2000/MT has been arrived at.
6. In the result, we find the whole demand has been issued without proper price analysis or investigation. Under the circumstances, we set aside the impugned order and the appeal of the appellant is allowed.
(Operative part pronounced in Court) (S. S. Garg) (P.K. Jain) Member (Judicial) Member (Technical) //SR 2 E/1659/05