Custom, Excise & Service Tax Tribunal
M/S Prestige Hm Polycontainer Ltd vs Commissioner Of Central Excise, ... on 9 June, 2010
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT AHMEDABAD COURT NO. II Appeals No. E/1906, 1913 , 1914 & 1915/03 (Arising out of Order-in-Original No. 11/NRN/Th-II/2003 dated 28.03.2003 passed by the Commissioner of Central Excise, Mumbai) For approval and signature: Honble Shri B.S.V. Murthy, Member (Technical Honble Shri Ashok Jindal, Member (Judicial) ======================================================
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 Prestige HM Polycontainer Ltd. Shri P.K. Gupta, MD Shri S.V. Hegde, VP Shri Mohan Suvarna, GM Appellants Vs. Commissioner of Central Excise, Thane-II Respondent Appearance: Shri Gajendra Jain Advocate for Appellants Shri Kishori Lal SDR for Respondent CORAM: SHRI B.S.V. MURTHY, MEMBER (TECHNICAL) SHRI ASHOK JINDAL, MEMBER (JUDICIAL) Date of Hearing: 09.06.2010 Date of Decision: 09.06.2010 ORDER NO. WZB/MUM/2009 Per: Ashok Jindal
M/s Prestige HM Polycontainer Ltd. has filed this appeal against the confirmation of demand of Rs.62,81,378/- and imposition of equivalent amount of penalty and Shri P.K. Gupta, MD, Shri S.V. Hegde, VP and Shri Mohan Suvarna, GM have filed the appeals against imposition of penalty of Rs.6 lakhs, Rs.6 lakhs and Rs.2 lakhs respectively.
2. The brief facts of the case are that the appellants having two units - one at Talasari (Maharashtra) and other in the Union Territory of Daman. At Talasari unit, the appellants were manufacturing HDPE barrels, skull barrels, lids and bungs and at Daman unit, the appellants are manufacturing HDPE barrels. They were paying duty on the said product at Talasari unit, which were being removed to Daman unit for undertaking operations such as de-burring, fitting of lids, printing where the goods were cleared on payment of duty after availing the Modvat credit to the duty paid at Talasari unit.
3. The issue involved in this case with regard to the valuation of goods cleared by Talasari unit to Daman unit, wherein it was alleged that the price arrived at under Section 4(1)(b) read with Rule 6(1)(b) of Valuation Rules, 1975 and under Rule 8 of the Valuation Rules, 2000 on the cost of production and not on the basis of transaction value as determined by the appellants while clearing the goods to their Daman unit i.e. re-sale price of goods by Daman unit less expenses at Daman unit. Statements of the officials i.e. co-appellants were recorded. A show-cause notice was issued. Demand was confirmed against the main unit along with equivalent amount of penalty and the various penalties were also imposed against the co-appellants. Aggrieved from the same, the appellants are before me.
4. The learned Advocate appearing on behalf of the appellants contended that in this case the period involved was 25.2.2000 to 31.3.2002 and the show-cause notice was issued on 1.7.2002. Hence, a part of the period from 25.2.2000 to 20.6.2001 is barred by limitation, which involves the duty of Rs.34,37,099/- as there was complete disclosure to the department and price declaration were filed based on advice given by the department. Hence, no charge of suppression can be imposed. He, further, submitted that in this case the price was concluded by the appellants on the re-sale price of the goods at Daman unit less expenses at Daman unit, which is more than the price determination under Section 4(1)(a) of the Valuation Rules, 1975 and Rule 8 of the Valuation Rules, 2000 as the case may be on cost of production basis, which is excess to the price to be determined. In that situation, he submitted that matter may be remanded back to the Commissioner for fresh consideration of the matter in accordance with law. He also submitted that it is a case of revenue neutrality as whatever duty payable by the Talasari unit is available as credit at Daman unit. In that situation, extended period is also not invocable and the demand is also not sustainable. For this contention, he relied on the following case laws: -
(i) Amco Batteries Ltd. Vs. CCE 2003 (153) ELT 7 (SC)
(ii) Jay Yushin Ltd. Vs. CCE- 2000 (119) ELT 718 (Tri-LB)
(iii) Kitply Ltd. Vs. CCE 2003 (55) RLT 726 (Tri)
(iv) Hindustan Copper Ltd. Vs. CCE 2001 (135)ELT 1342 (Tri)
5. On the other hand, learned SDR submitted that in this case the correct formula is to be determined as per Rule 8 of the Valuation Rules, 00, wherein Rule 8 says that where the excisable goods are not sold by the assessee but are used for consumption by him or on his behalf in the production or manufacture of other articles, the value shall be one hundred and fifteen percent of the cost of production or manufacture of such goods. In this case, while clearing the goods to their unit at Daman, the appellants have not adopted the said formula to arrive at the correct value on which the excess duty is payable and the Commissioner in his order has correctly adopted the procedure to arrive at the correct value to be determined. As the appellants have failed to follow the correct formula to arrive at correct value, the extended period is also invocable in this case. Accordingly, he submitted that the appeals are liable to be dismissed.
6. Heard both sides.
7. On careful examination of the submissions made by both sides, we find that in this case, the demand pertains to the period 25.2.2000 to 31.3.2002. We further find that while filing the price declaration, the appellants have declared all the particulars required by them on the basis of advice given by the department and the same has not been disputed by the Commissioner. We also find that mere filing the price declaration in wrong proforma does not amount to suppression of facts. Accordingly, we find that in this case, the extended period is not invocable and demand pertaining to the period 25.2.2000 to 20.6.2001 is not sustainable. As there is no suppression of facts, no penalty is leviable on the appellant and co-appellants as they have not suppressed the facts.
8. Further, we are in agreement with the argument advanced by the learned DR that the valuation of the goods is to be done as per Rule 8 of the Valuation Rules, 2000 and for that the appellants have to pay the excise duty on cost of production @ 115%. Accordingly, we find that this matter requires re-computation of the duty determination on the basis of CAS-4 as per Rule 8 of the Valuation Rules, 2000. Accordingly, we pass the following order: -
(a) Demand for extended period is set aside.
(b) All penalties on the appellants and co-appellants are set aside.
(c) Demand within limitation period is to be worked out by the Commissioner on the basis of CAS-4 and the appellants shall submit all the details to the Commissioner within three months and element of profit will be added to the cost of production as per law while arriving at correct on which the duty is payable.
9. With these observations, the appeals are disposed of and matter is remanded back to the Commissioner for fresh adjudication as directed herein above.
(Pronounced in Court)
(B.S.V. Murthy) Ashok Jindal)
Member (Technical) Member (Judicial)
Vks/
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