Custom, Excise & Service Tax Tribunal
) M/S. Ferro Alloys Corporation Ltd vs Commissioner Of Central Excise, ... on 12 December, 2011
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
EAST ZONAL BENCH:KOLKATA
1) EXCISE APPEAL NO.EDM-442/03
AND
2) EXCISE APPEAL NO.EDM-175/05
[ARISING OUT OF THE FOLLOWING ORDERs:-
FOR SL. NO.(1):ORDER-IN-ORIGINAL NO.CCE/BBSR-I/12/2003 DATED 28.08.2003 PASSED BY COMMISSIONER OF CENTRAL EXCISE AND CUSTOMS, BHUBANESWAR-I;
AND
FOR SL. NO.(2):ORDER-IN-APPEAL NO.275/BBSR-I/04 DATED 10.12.2004 PASSED BY COMMISSIONER (APPEALS), CENTRAL EXCISE & CUSTOMS, BHUBANESWAR]
FOR APPROVAL AND SIGNATURES OF
SHRI S.K.GAULE, HONBLE MEMBER(TECHNICAL)
DR. D.M.MISRA, HONBLE 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?
2. Whether it should be released under Rule 27 of the
CESTAT(Procedure) Rules, 1982 for publication in any
Authorative 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 Departmental
Authorities?
1) M/S. FERRO ALLOYS CORPORATION LTD.
APPELLANT/ASSESSEE
VERSUS
COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX, BHUBANESWAR-I
RESPONDENT COMMISSIONER
AND
2) VICE VERSA APPEARANCE:
SHRI K.K.ACHARYA, ADVOCATE FOR THE APPELLANT/ASSESSEE; SHRI S.MISHRA, ADDL. COMMR.(A.R.) FOR THE REVENUE. CORAM:
SHRI S.K.GAULE, HONBLE MEMBER (TECHNICAL) DR. D.M.MISRA, HONBLE MEMBER (JUDICIAL) DATE OF HEARING & DECISION: 12.12.2011 ORDER NO Per SHRI S.K.GAULE Heard both sides.
2. Both the Assessee and the Revenue are in appeal in this case. Being aggrieved by the Order-in-Original No.CCE/BBSR-I/12/2003 dated 28.08.03, the Assessee filed an Appeal, whereby the Commissioner confirmed the demand of Rs.78,92,762.00 and imposed a penalty of Rs.8,00,000.00 under Rule 173Q, and being aggrieved by the Order-in-Appeal No.275/BBSR-I/2004 dated 10.12.2004, the Revenue filed another Appeal. The issue involved in both these Appeals is common. Therefore, they are being taken up together for disposal.
3. Briefly stated the facts of the case are that the Assessee is a 100% EOU and they had also cleared the goods to Domestic Tariff Area (DTA) during the period from 16.09.1999 to 14.03.2001. They had cleared their goods by arriving at the assessable value in terms of the Boards Circular No.512/91/93-Cus-IV dated 18.05.1994, whereas the Departments view was to charge duty by arriving at the assessable value in terms of the Circular No.7/2001 dated 06.02.2001. The Department had also raised a demand on the differential value of the clearances made by the Assessee to their sister unit by working out the assessable value in terms of Rule 8 of Central Excise Valuation Rules, 2000, whereas the Assessee paid duty based on the assessable value what they had actually charged from other independent buyers. The show cause notice also raised a demand against the Assessee on account of non-inclusion of the differential amount of freight on which they had paid the duty and the freight which they had recovered from their customers. All the proceedings were confirmed by the learned Commissioner. Aggrieved by the same, the Assessee filed the Appeal. The Revenue also filed another Appeal for the period from 20.03.2001 to 28.02.2002, on the ground that the learned Commissioner (Appeals) should not have decided the issue, when the Departments appeal was pending decision, against the Larger Benchs decision in the case of Indoworth India Pvt. Ltd. vs. CCE, Nagpur reported in 2004(170) ELT (Tri.-LB).
4. In so far as the valuation of clearance made in DTA is concerned, the contention of the Assessee is that the Tribunal in the case of Futura Polymers Ltd. vs. CCE, Chennai (supra) held that the demand for the period from February, 2000 to January, 2001 has to be governed by the earlier Circular, i.e.Circular dated 18.05.94. The Larger Bench of this Tribunal in the case of Indoworth India Ltd. vs. CCE, Nagpur (supra) agreed with the view taken by this Tribunal in the case of Futura Polymers (supra) and held that the method as adopted by the Revenue for the calculation of duty of Customs is valid only after 01.03.2002. The contention is that the Board through its Counsel intimated the Honble Supreme Court that the Department accepted the Larger Benchs decision in the case of Indoworth India (supra) and in view of this, the Honble Supreme Court vide its Order dated 12.10.11 dismissed the appeal filed by the Department against the Tribunals decision in the case of Futura Polymers Ltd. (supra). Thus the issue stands settled in favour of the Assessee for the period prior to 01.03.2002. In so far as the demand of duty on value of stock-transfer is concerned, the contention of the Assessee is that in their case, the value of sale to independent buyers is available. Therefore, in case of the clearances made to the sister unit of the Assessees firm, the value should be as per the value adopted in case of the independent buyers. In support of their contention, they placed reliance on a Larger Bench decision in the case of Ispat Industry Ltd. vs. C.C.E. reported in 2007(209) ELT 185 (Tri.-LB). As regards the inclusion of freight recovered from their customers, the Assessee contended that differential amount between equalized freight and the freight actually paid, is not includible in the assessable value. In support of their contention, they have placed reliance on the Honble Supreme Courts decision in the case of Boroda Electric Meters Ltd. Vs. Collector of Central Excise reported in 1997(94) ELT 13(SC).
5. Learned A.R. appearing for the Department reiterates the findings of the lower authorities. In so far as the valuation in case of stock-transfer is concerned, learned AR submits that the valuation in that case should be done as per Rule 8 of the Central Excise Valuation Rules, 2000. In so far as the inclusion of additional freight is concerned, the learned AR contended that the Assessee had charged the equalized freight of Rs.800.00 per MT. They had also charged extra over and above the equalized freight. This would form part of the assessable value.
6. We have considered the submissions of both sides and perused the records. In so far as the valuation for DTA sale is concerned, we agree with the contention of the Assessee that the issue stands settled in view of the decisions in the case of Futura Polymers Ltd. and Indoworth India Ltd. (supra). Undisputedly, the period involved in this case is prior to 01.03.2002, which is covered, vide the procedure prescribed under the Circular dated 18.05.1994. The Assessee had calculated the duty, vide the method prescribed under the aforesaid Circular, which is also not in dispute. Therefore, the demand to this extent is not sustainable. In so far as the valuation in case of stock-transfer is concerned, the assessable value for sale to independent buyers is available, and it is not in dispute that the Assessee had paid the duty as per such assessable value. The Larger Bench of this Tribunal in the case of Ispat Industries (supra) held that the application of Rule 4 of Central Excise Valuation Rules, 2000 will lead to determination of a value which will be more consistent with the provisions of Central Excise Act, 1944, and the provisions of Rule 8 ibid, would not apply. In these circumstances, the demand against the Assessee on this count is also not sustainable. In so far as the demand of duty on differential amount between equalized freight and freight actually paid, the Honble Supreme Court in the case of Boroda Electric Meters Ltd. vs. Collector of Central Excise (supra) held that wherever freight actually paid is less than the amount collected by way of freight and transportation charges, the differential amount is not includible in the assessable value, since the duty of excise is a tax on the manufacturer and not a tax on the profits made by a dealer on transportation. Thus, the differential amount is not includible in the assessable value. In these circumstances, the Assessees Appeal is allowed and the Revenues Appeal is dismissed.
Dictated and pronounced in the open court.
Sd/-14.12.11 Sd/-14.12.11
(D.M.MISRA) (S.K.GAULE)
MEMBER (JUDICIAL) MEMBER(TECHNICAL)
DUTTA/
5
EX.APPs.442/03 & 175/05