Custom, Excise & Service Tax Tribunal
Cce, Jalandhar vs M/S. Max India Ltd on 29 August, 2013
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI PRINCIPAL BENCH, COURT NO. III Excise Appeal No. 2104 of 2005-Ex[BR] Excise CO/25/2006 & E/Misc/4398/2012 [Arising out of Review Order No. 113-R/2005 dated 6.5.2005 passed by Commissioner of Central Excise, Jalandhar (Chandigarh) ] For approval and signature: Honble Ms. Archana Wadhwa, Judicial Member Honble Mr. Manmohan Singh, Technical Member 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 should 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? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes CCE, Jalandhar Appellants Vs. M/s. Max India Ltd. Respondent
Appearance:
Shri V.P. Batra, DR for the Appellants Shri V. Swaminathan, Advocate for the Respondent Coram:
Honble Ms. Archana Wadhwa, Judicial Member Honble Mr. Manmohan Singh, Technical Member Date of Hearing /Decision: 29.08.2013 ORDER NO . FO/A/ 57552 /2013-EX (Br) Per Ms. Archana Wadhwa (for the Bench) :
Being aggrieved with the order passed by Commissioner vide which he has dropped the demand against the respondents, Revenue has filed the present appeal.
2. As per facts on record, the respondents are engaged in the manufacture of plain BOPP film which are sold by them to the independent buyers as also to their sister concern M/s. Max Foil Division and Metalizer Division. The said two units are further working upon the said BOPP film and are clearing the same on payment of duty.
The dispute in the present appeal relates to the valuation of BOPP film being cleared by the appellant to their sister concern. Revenues stand is that they are required to pay the duty on the said BOPP film cleared to their sister concern units by adopting the corresponding assessable value at the rate at which they are selling the same goods to independent buyers. For the said purpose, show cause notice was issued to the respondents on 6.9.2000 raising demand of duty of Rs.1,45,26,987/-. Commissioner during the adjudication proceedings, took note of the respondents submissions that films cleared to their sister units as also to the independent buyers were varying in size and held that the reduced value was acceptable. He accordingly dropped the proceedings. We also note that the plea of limitation and Revenue neutrality was raised before Commissioner, but he has not passed the order on the same on the ground that inasmuch as the demand was being dropped on merits, the decision on the said two issues would only be academic.
3. Learned DR appearing for the Revenue has drawn our attention to some of the paragraphs of the impugned orders wherein the size of the film cleared to the sister concern and cleared to independent buyers are identical. He fairly agreed that though the Revenue has proposed to adopt the highest price at which the goods were sold to independent buyers, even though there were lower price available at which they were selling the goods to to independent customers and as such, submits that average of such price could be adopted for clearance of films to their sister unit.
4. We do not intend to go to the merits of the case as we are of the view that demand is admittedly barred by limitation having been raised by invoking the longer period of limitation. It stands admitted in the show cause notice that the assessee was filing the declaration under Rule 173 C of Central Excise Rules, disclosing the fact that clearance to their sister concern are on the basis of cost of production, in terms of provisions of Rule 6 (b)(ii) of the Erstwhile Central Excise Valuation Rules.
5. However, we note that notice proposed to invoke the longer period of limitation on the simplicitor ground that appellant has no where disclosed in his declaration that the Director in the sister unit as also in the appellant unit are related person.
6. We do not find any justification in the above reasoning. Admittedly the appellant had filed the price declaration showing clearance of the goods to their sister concern unit on the basis of cost of production. This fact should have been sufficient for the Revenue to raise their eye brows inasmuch as they were aware that the appellant was also selling their product in the open market, apart from clearing the same to their sister unit. The said declaration stand approved by the Revenue without raising any objection. As such, we are of the view that extended period was not available to the Revenue.
7. Apart from that, we also take note of the fact that whatever duty was being paid by the respondents, was available as credit to their sister unit and the said credit was being utilized by their sister unit for payment of duty on their final product. As such, the entire situation was revenue neutral. We take note of various decision relied upon by the learned advocate appearing for the respondent laying down that in case of revenue neutrality, no malafide can be attributed to the assessee so as to justify invocation of longer period of limitation. Reference is made to the decisions of the Supreme Court in the case of :-
1. CC vs. Textile Corporation Marathwada Ltd.
[2008 (231) ELT 195 (SC)]
2. CCE, Jamshedpur vs. Jamshedpur Beverages [2007 (214) ELT 321 (SC)]
3. CCE, Pune vs. Coca Cola (I) Ltd.
[2007 (213) ELT 490 9SC)] As also the Honble Gujarat High Court decision in the case of CCE, Surat II vs. Gujarat Glass Pvt. Ltd. [2013 (290) ELT 538 (Guj HC).
8. The said decision stand followed by the Tribunal in number of judgments. Specific reference can be made to the following decisions:
1. CCE, Ahmedabad vs Crystal Quinone (P) Ltd.
[2009(233) ELT 499(Tri)]
2. Hindustan Zinc Ltd. vs. CCE, Jaipur II [2008(232)ELT 687 (Tri)
3. CCE, Chennai vs. SS Power Switch gear [2009 (247) ELT 374 (Tri)]
4. Tenneco RC India Pvt. Ltd. vs. CCE, Chennai [2009 (235) ELT 105 (Tri)]
5. Daman Ganga Board Mills (P) Ltd. vs. CCE Daman [2012(276) ELT 532 (Tri)]
9. For all the above reasons, we are of the view that demand is barred by limitation and is also not sustainable on the point of revenue-neutrality. As such, without going into the detailed merits of the case, we reject the appeal filed by the Revenue on the said ground.
(dictated and pronounced in the open court )
( Archana Wadhwa ) Member(Judicial)
( Manmohan Singh ) Member(Technical)
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