Custom, Excise & Service Tax Tribunal
Ahmednagar Forgings Limited vs Cce Aurangabad on 4 October, 2018
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
COURT NO.
Appeal No. E/1232,1233/2008
(Arising out of Order-in-Appeal No. JAK(221)78/08 and
JAK(222)79/08 dt.07/08/2008 passed by the Commissioner of
Customs & Central Excise, Aurangabad )
Ahmednagar Forgings Limited : Appellant
VS
Commissioner of Customs & Central Excise, : Respondent
Aurangabad Appearance Shri S.B. Awate, Advocate for Appellant Shri A.B. Kulgod, Asstt. Commr. (A.R) for respondent CORAM:
Hon'ble Dr. D.M. Misra, Member (Judicial) Hon'ble Mr. C.J. Mathew, Member (Technical) Date of hearing : 04/10/2018 Date of decision : 04/10/2018 ORDER NO. A/87558-87559/2018 Per : Dr. D.M. Misra These two appeals are filed against respective orders in appeals, since common issues are involved, therefore, the appeals are taken up together for disposal.
2. Briefly stated the facts of the case are that the appellant had been engaged in the manufacture of excisable goods, namely, Nuts Bolts, Pins, etc. falling under Chapter 73 of the Central Excise Tariff Act, 1985. The appellant had sold their manufacturing unit 2 Appeal No. E/1232, 1233/2008 to one M/s. N Cube Fasteners Pvt. Ltd., Pune and accordingly surrendered their Central Excise Registration. On 8.7.2005, they had also informed the department that they were not having any stock of finished excisable goods, inputs etc. and they have paid appropriate excise duty in respect of all excisable goods manufactured and cleared by them. Their other unit had furnished an undertaking to the department, on the same date i.e. 08.7.2005 stating that they would be legally bound to fulfill and discharge all the obligations in respect of the unit sold to M/s. N Cube Fasteners Pvt. Ltd., Pune. Later, on audit of their books of accounts, it was noticed by the department that in the balance sheet for the financial year ending 31.3.2005, values of the stock of work-in- progress goods was shown higher in comparison to the value reflected in their ER-1 Returns cleared as waste and scrap. Consequently, alleging that the goods sold by them at the time of sale of the unit was undervalued demand notices were issued for recovery of the differential duty of Rs.2,33,793/- & Rs.4,51,551/- on 24.10.2007. On adjudication, the demands were confirmed with interest and penalty. Aggrieved by the said order, they filed appeal before the Ld. Commissioner (Appeals), who in turn, rejected their appeals. Hence, the present appeals.
3. Ld. Advocate for the appellants has submitted that while at the time of sale of their unit the appellants were having some work- in-progress of goods in their factory premises and accordingly sold the same to M/s. N Cube Fasteners Pvt. Ltd., Pune against proper excise invoices and against transaction value shown in the 3 Appeal No. E/1232, 1233/2008 respective invoices. It is his contention that there was no additional consideration received nor allegation of flow back from the customers, who purchased the goods, hence rejection of transaction value without any basis, accordingly, unsustainable in law. Further, the Ld. Advocate has submitted that after rejection of the transaction value, the relevant Rule under which department proposed to determine the value the goods has not been spelt out. Therefore, confirmation of differential duty invoking the extended period of limitation, is bad in law.
4. Ld. AR for the Revenue reiterates the findings of the Ld. Commissioner (Appeals).
5. We have carefully considered the submissions advanced by both the sides and perused the records. We find that the differential duty has been demanded from the appellant solely on the ground that the transaction value declared by the appellant on sale of their work-in-progress goods is incorrect as the inventory value shown in the balance sheet was higher. We do not find merit in the approach of the Revenue in revising the assessment. In rejecting the transaction value of the goods sold, no alternate method of valuation nor any relevant provision under which the valuation has been carried out is disclosed in the Notice. Also, we do not find from the records that the appellant had alleged to have been received any amount in excess of the transaction value charged by them to their customer on which they discharged appropriate excise duty for the work-in-progress goods shown in their April 2005 to July 2005 ER.1 Returns filed. In these 4 Appeal No. E/1232, 1233/2008 circumstances, we do not find justification in rejecting the transaction value. Consequently, the impugned orders are set aside and appeals are allowed with consequential relief, if any, as per law.
(Operative portion of the order pronounced in court ) (C.J. Mathew) (Dr. D.M. Misra) Member (Technical) Member (Judicial) SM.