Custom, Excise & Service Tax Tribunal
M/S. Bosch Chassis Systems India Ltd vs Commissioner Of Central Excise, Nashik on 25 August, 2011
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
COURT NO.II
APPEAL NO.E/1375/04
(Arising out of Order-in- Appeal No. CEX-XI/JMJ/23/916/Appeal/NSK/2004 dtd. 28.1.04 passed by the Commissioner of Central Excise & Customs (Appeals), Nashik )
For approval and signature:
Honble Mr Ashok Jindal, Member(Judicial)
Honble Mr.Sahab Singh, Member(Technical)
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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 :
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?
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M/s. Bosch Chassis Systems India Ltd.
:
Appellant
VS
Commissioner of Central Excise, Nashik
Respondent
Appearance
Mrs. Padmavati Patil, advocate for Appellant
Shri Novneet, SDR for Respondet
CORAM:
Mr.Ashok Jindal, Member(Judicial)
Mr.Sahab Singh, Member(Technical)
Date of hearing: 25/08/11
Date of decision 25/08/11
ORDER NO.
Per : Ashok Jindal
The appellants are in appeal against the impugned order confirming the demand of differential duty of Rs.4,80,282/- alongwith interest and penalty of Rs. 50,000/- under Rule 173Q of the Central Excise Rules, 1944.
2. The brief facts of the case are that the appellants are the manufacturers of M.V.parts which they cleared to their own factory at Gurgaon for captive consumption during the period October 1993 to March, 1994. For determination of assessable value of their clearances, they filed price list with the department adding profit margin of 3.4% and 3.77% which was approved by the competent authority. However, from the audited balance sheet for the year 1992-93, it appeared that the percentage of gross profit is 12% as compared to the sales. As per the provisions of central excise law, the appellants would require to add gross profit of previous year as per audited balance sheet while arriving at the assessable value of the goods used for captive consumption. Therefore, show-cause notice was issued for undervaluation of their clearances, demanding differential duty alongwith interest and imposition of penalty. The show-cause notice was adjudicated and impugned demand alongwith interest and penalty was confirmed. On appeal before the first appellate authority, the adjudication order was confirmed. Therefore, the appellants are in appeal before us.
3. Mrs. P.Patil, the ld.advocate appearing on behalf of the appellants submitted that, in fact, the appellants have filed their price list during the impugned period and the same has been approved by the competent authority. Therefore, the question of undervaluation does not arise. She further submitted that the profit margin of 12% includes the deferred payment of sales tax as per the scheme of Maharastra Govt. which should be deducted from the gross profit. Therefore, the said amount of sales tax is not includible in the assessable value. She further submitted that whatever duty they would have paid, the same is available to their unit at Gurgaon. Therefore, it is a revenue neutral situation. Therefore, the allegation of suppression does not sustain. She also contended that as the show-cause notice has been issued in this case on 29.6.98 for the period October, 1993 to March, 1994, the demands are barred by limitation as the price declaration by the appellants was well within the knowledge of the department and the said price list has been approved by the competent authority. To support this contention, she placed reliance on the decision in the case of Ballarpur Industries Ltd vs. Union of India reported in 1994 (74)ELT 795(Del.). She also relies on the decision in the case of Rashtriya Chemicals & Fertilizers Ltd. vs Commr.of C.Ex., Mumbai reported in 2006(202)ELT 622 (Tri-Mumbai). She, therefore, prayed that the impugned order be set aside.
4. On the other hand, the ld. D.R. appearing for the Revenue submitted that as per the Central Excise Valuation Rules, the appellants were required to add the profit as per the audited balance sheet of the previous year while arriving at the assessable value of the clearances for the impugned period which they had failed to do so. Therefore, the appellants had undervalued their clearances and duty demands are justified. In support of his contention, he placed reliance on the decision of the Supreme Court in the case of CCE, Aurangabad vs Raymonds Ltd. reported in 2006(204)ELT 3(S.C.).
5. After hearing both sides, we find that in this case, the show-cause notice has been issued on 29.6.98 for the period October,93 to March, 94 on the allegation of undervaluation of their clearances to their sister unit for captive consumption. In fact, it is on record that the appellants have filed their price list during the impugned period and the same was approved by the competent authority. Therefore, the allegation of suppression is not sustainable in the facts and circumstances of the case. In the case of Ballarpur Industries Ltd.(supra) the Delhi High Court had held that it is clear from the evidence that the petitioners have filed the classification list, the proper return and the price list and invoices. The price list bears the endorsement approved from the Excise Department. In the face of this documentary evidence supplied by the petitioners themselves, it is difficult to understand as to how the Revenue has concluded that there was misstatement or suppression of facts. Therefore, without going into the merits of the case, we find that the show-cause notice is bad by limitation in the light of the decision in the case of Ballarpur Industries Ltd.(supra). Accordingly, the demands are not sustainable and penalty cannot be imposed.
6. With these observations, the appeal is allowed with consequential relief by setting aside the impugned order.
Sahab Singh Member(Technical) Ashok Jindal Member(Judicial) pv 3