Custom, Excise & Service Tax Tribunal
Jsw Steel Ltd vs Commissioner Of Central Excise, ... on 10 February, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Final Order No. 20207 / 2014 Application(s) Involved: E/Stay/1346/2012 in E/1885/2012-DB Appeal(s) Involved: E/1885/2012-DB [Arising out of Order-in-Original No. 04/2012 dated 29/03/2012 passed by the Commissioner of Central Excise and Customs, Belgaum] JSW Steel Ltd. (Formerly Jindal Vijaynagar Steel Ltd.) P.O. Vidyanagar, Toranagallu, Bellary Dist. - 583 275 Karnataka Appellant(s) Versus Commissioner of Central Excise, Customs and Service Tax - Belgaum No. 71, Club Road, Central Excise Building, Belgaum - 590 001, Karnataka Respondent(s)
Appearance:
Mr. K.S. Ravi Shankar, Advocate # 152, Race Course Road, Bangalore - 560 001 Karnataka For the Appellant Mr. N. Jagdish, AR For the Respondent CORAM:
HON'BLE SHRI B.S.V. MURTHY, TECHNICAL MEMBER HON'BLE SHRI S.K. MOHANTY, JUDICIAL MEMBER Date of Hearing: 10/02/2014 Date of Decision: 10/02/2014 Order Per: B.S.V. MURTHY The appellant has an integrated steel plant in Toranagallu, Bellary District where they manufacture HR Coils/Plates/Slabs/HR sheets and allied products. These goods are sold as well as sent to other units for further manufacture. Other units are located in Salem, Tarapur and Vasind. The dispute has arisen between the department and the assessee as to whether the goods cleared to their other units should be valued under Rule 8 of Valuation Rules 2000 which is on the basis of cost of production or should be valued on the basis of Rule 4 of Central Excise Valuation Rules which required the assessee to value the goods on the basis of assessable value of comparable goods. Proceedings were initiated invoking extended period for demand and in the impugned order the Commissioner has limited the demand to the normal period taking into account the submission that there was a circular issued by the Board in 2002 taking a view that where goods are cleared for captive consumption, or cleared to other units, valuation has to be done under Rule 8 of Valuation Rules. Further in view of the fact that in the case of ISPAT Industries Ltd. Vs. CCE, Raigad [2007 (209) E.L.T. 185 (Tri.-LB)] wherein it was held that where the entire production is not sold, naturally Rule 8 of Valuation Rules would come into play and in the case of assessee since the entire goods are not captively consumed, valuation of the goods which are cleared to their other units should be on the basis of Rule 4 of Valuation Rules. Relying on the decision of the Tribunal Larger Bench in the case of ISPAT Industries Ltd., the Commissioner has confirmed the demand for the normal period amounting to Rs. 48.98 crores (approximately) for the period from November 2009 to October 2011.
2. The learned senior counsel on behalf of the appellant submitted that the Boards Circular No. 643/34/2002-CX dated 01.07.2002 was not withdrawn or deleted and it was deleted on 22.11.2013 when Circular No. 975/9/2013-CX was issued revising the method of assessment of captive consumption or cleared to other units of the same assessee. This was done after the amendment of Rule 8, 9 and 10 of Central Excise Valuation Rules which dealt with determination of assessable value in the case of captive consumption or sold to related persons on 25.11.2013. He submits that in view of the amendment in 2013 and the fact that the circular issued by the Board was never revised in spite of the decision of the Larger Bench earlier, a view can be entertained that the Boards circular remained valid and therefore the assessee cannot be found fault with for following the circular. He also submits that the circular issued by the Board is binding on the Commissioner. It was also submitted that the Commissioner has considered all the submissions made by the appellants in just one paragraph and according to the learned counsel, he has not really considered all the submissions made in proper perspective. He submits that appellants had submitted that after the amendment of section 4 in 2000, the assessment has to be made on each removal and this fact even though submitted in reply has not at all been dealt with. He draws our attention to a statement prepared by the appellant and submitted today wherein the appellants have calculated the clearances of goods which have to be assessed under Rule 4 of Valuation Rules in accordance with the decision of the Larger Bench. In any case it is the submission of the appellant that where there were no similar goods to be assessed under Rule 4, the assessment already made by the assessee under self-assessment viz. applying Rule 8 in respect of those clearances have to be excluded. Further it was also submitted that there were exports also which also have been assessed under Rule 4 of Valuation Rules and since exports are exempt from payment of duty and since same principles had been adopted and this is not proper. On the basis of revised calculation it was submitted that at best the demand can be made up to the extent of Rs. 8,72,12,119/-. It was submitted that even this amount according to the appellant is not payable since the whole situation is revenue-neutral and whatever amount is paid as duty in Bellary unit is available as credit in other units where these items are used as inputs.
3. The learned AR would submit that the revised calculation and the submissions made about applicability of Rule 8 of Valuation Rules are totally new submissions which were not made before the original authority and no application for producing additional evidence has been made and therefore these submissions should not be taken into account. Further he also submits that the decision taken by the Commissioner is in accordance with law laid down by the Larger Bench of the Tribunal and the application of Boards circular by the Commissioner does not arise since the decision of the Larger Bench has to be considered as prevailing over the Boards circular. He also submits that no retrospective effect can be given to the amendments carried out in the Valuation Rules on 25.11.2013.
4. We have considered the submissions made by both the sides. It was vehemently argued by the learned AR that the facts brought before us today to bring down the demand from more than Rs. 48 crores to Rs. 8.72 crores approximately appear to be totally new facts. However we find that the argument of the assessee that each removal under a document has to be assessed as per the provisions of section 4 of CE Act, 1944 was placed before the adjudicating authority and not dealt with. The calculation sheet produced before us today is the result of this ground advanced. We find that the submissions made cannot be rejected. We feel that this requires a consideration by the Commissioner. Further other submissions made about retrospective applicability of the amendments, the applicability of Boards circular and whether it is binding on the Commissioner and the effect of the decision of the Larger Bench on the Boards circular and its applicability on the departmental authorities are required to be considered in greater detail. Under these circumstances, the request made by the learned counsel that the matter may be remanded to the original authority so that he can consider his submissions and make a detailed observation on these issues in our opinion is reasonable.
5. We also find that offer made by the learned counsel that the appellant would deposit the amount worked out by them in accordance with the interpretation of Rule 4 and Rule 8 of Valuation Rules subject to verification by the authorities concerned has to be accepted at this stage. However even though the learned counsel submitted that interest would not be payable in view of revenue-neutrality and bona fide belief etc, we consider that since we have taken a prima facie view on merit against the assessee, in our opinion interest is also liable to be paid.
6. In view of the above observations, we consider that at this stage itself the matter should be remanded to the original adjudicating authority rather than requiring the appellants to deposit the amount offered to be paid and passing any order on the very same issue. Learned AR also has no objection.
7. In view of the above discussion, appellant is directed to deposit an amount of Rs. 8,72,12,119/- with interest within four weeks and report compliance on 10.03.2014 to the Commissioner of Central Excise, the adjudicating authority, who after noting the compliance shall proceed to adjudicate the matter afresh. Needless to say the appellant shall be given reasonable opportunity to present their case before a final decision is taken by the Commissioner. It is also made clear that if the appellant failed to deposit the amount within four weeks, Commissioner will be free to enforce the demand made against the appellant and recover all the adjudged dues. The stay application as well as the appeal are disposed of in above terms.
(Order dictated and pronounced in open court) (S.K. MOHANTY) JUDICIAL MEMBER (B.S.V. MURTHY) TECHNICAL MEMBER iss