Custom, Excise & Service Tax Tribunal
M/S Bloom Dekor Ltd vs Commissioner Of Central Excise, ... on 19 February, 2018
In The Customs, Excise & Service Tax Appellate Tribunal West Zonal Bench at Ahmedabad ~~~~~ Application No. E/COD/10751/2016 Appeal No.: E/12045/2016-DB (Arising out of AHM-EXCUS-003-APP-007-051-15-16 dated 05.05.2015 passed by Commissioner (Appeals) of Central Excise, Ahmedabad-I) M/s Bloom Dekor Ltd. : Appellant (s) Versus Commissioner of Central Excise, Ahmedabad-I : Respondent (s)
Represented by:
For Appellant (s) : Shri Amol P. Dave, Advocate For Respondent (s): Shri S.N. Gohil, Authorised Representative CORAM:
Dr. D. M. Misra, Honble Member (Judicial) Mr. Raju, Honble Member (Technical) Date of Hearing : 09.02.2018 Date of decision: 19.02.2018 Order No. A/ 10373 /2018 Per: Raju This appeal has been filed by M/s Bloom Dekor Ltd. against confirmation of demand of Central Excise duty and imposition of penalties thereon.
2. Learned Counsel for the appellant pointed out that they are engaged in manufacture and clearance of goods on payment of excise duty. Learned Counsel pointed out that Revenue in a mistaken notion that they were clearing goods to their depots, issued show-cause notice demanding excise duty invoking Rule 7 of the Central Excise Valuation (Determination of price of excisable goods) Rules, 2000. Learned Counsel argued that they are actually selling the goods at the factory gate and not clearing the same to their depots. Learned Counsel relies on the grounds of appeal, wherein it has been argued that they were selling the goods at factory gate to the dealer and dealers are neither depot nor branches of the appellant. He argued that the goods were sold at factory gate on principal to principal basis and thus the value of the goods should be assessed under Section 4(1)(a) of the Central Excise Act, 1944 and invocation of Section 4(3)(c)(iii) of the Act read with Rule 7, 2(b) & 2(c) of the Central Excise Valuation (Determination of price of excisable goods) Rules, 2000 is not proper. It was argued that the pre-requisite condition for invocation of Rule 7 of Central Excise Rules is that the excisable goods are not sold by the assessee at the time and place of removal but are transferred to depot and premises of the consignment agent or any other place or premises. It was argued that Revenue has wrongly relied on the instruction on valuation issued by CBE&C vide F.No. 354/81/2000-TRU dated 30.6.2010. It was also argued that the Commissioner (Appeals) has not examined all the case laws cited by the appellant and while submissions were recorded as having been made but the same has not been considered including the claim for correct determination of duty in their appeal memo. It was also argued that the transaction on sale of goods and payment of Central Excise duty are duly account in Books of Account and Balance-sheet and in these circumstances, invocation of extended period of limitation is improper. It was also argued that the transactions were revenue neutral as the appellant had paid excise duty demanded then the appellant would have been entitled to avail CENVAT Credit of the entire amount of duty so paid.
3. Learned AR relies on the impugned order.
4. We have gone through the rival submissions. A perusal of the defence made by the appellant before the original adjudicating authority vide letter dated 7.8.2014 shows that the appellant had admitted that they were making clearance to various consignment agents during the period April, 2009 to March, 2012. It has also been pointed out that the appellant had calculated the entire differential value, expenses, commission, cash discount etc. during the said period and worked out the duty payable which was paid by cash in part. Intimation was also sent to Revenue vide their letter dated 5.10.2012. It has been argued that since the entire details has been submitted by the appellant regarding clearances made to various consignment agents during the said period vide letter dated 3.8.2012 received by the Revenue on 6.8.2012, a show-cause notice dated 23.8.2013 was issued demanding the said duty. The noticee has also contended that vide monthly returns for February, 2012 and March, 2013 they had declared the payment of differential duty paid for the said clearances and therefore allegation of suppression is not sustainable. It was also asserted that show-cause notice did not consider the expenses incurred towards transportation, commission of C&F agent and cash discount as well as other expenses shall be permissible under the Central Excise Valuation (Determination of price of excisable goods) Rules, 2000. A perusal of the foresaid reply clearly show that the appellant had admitted that they are clearing the goods to the consignment agent and are not selling the gods from the factory gate. There was not an iota of assertion that the goods are being sold at the factory gate and that Section 4(1)(a) is applicable. The appeal papers do not contained the grounds of appeal filed before the Commissioner (Appeals), however, a perusal of the grounds of appeal narrated by the Commissioner (Appeals) in para 5 of the impugned order also shows that there is a clear admission that the goods were cleared in stock transfer to the consignment agent. There was no assertion whatsoever regarding sale at factory gate. It is only in the second appeal that the appellants have come out with this new assertion that the goods are being sold at factory gate. In para 3 of the statement of facts before Tribunal, the appellants have wrongly stated that in reply dated 7.8.2014 (filed before the original adjudicating authority) they had asserted that there was factory gate sale and transaction value at factory gate was available. It is totally incorrect and wrong assertion made by the appellant.
5. Now, we examine the law in this regard.
Section 4 valuation of excisable goods for the purpose of charging of duty of excise under Central Excise Act, 1944, stipulates as under: -
(1) Where under this Act, the duty of excise is chargeable on any excisable goods with reference to their value, then, on each removal of the goods, such value shall -
(a) in a case where the goods are sold by the assessee, for delivery at the time and place of the removal, the assessee and the buyer of the goods are not related and the price is the sole consideration for the sale, be the transaction value;
(b) in any other case, including the case where the goods are not sold, be the value determined in such manner as may be prescribed.
The phrase place of removal is defined under Section 4(3)) of the Central Excise Act, 1944. It states that: -
?(c) place of removal means -
(i) a factory or any other place or premises of production or manufacture of the excisable goods;
(ii) a warehouse or any other place or premises wherein the excisable goods have been permitted to be deposited without [payment of duty;]
iii) a depot,?premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory; from where such goods are removed;
Rule 7 of Central Excise Valuation (Determination of price of excisable goods) Rules, 2000, further stipulates as under: -
Where the excisable goods are not sold by the assessee at the time and place of removal but are transferred to a depot, premises of a consignment agent or any other place or premises (hereinafter referred to as such other place) from where the excisable goods are to be sold after their clearance from the place of removal and where the assessee and the buyer of the said goods are not related and the price is the sole consideration for the sale, the value shall be the normal transaction value of such goods sold from such other place at or about the same time and, where such goods are not sold at or about the same time, at the time nearest to the time of removal of goods under assessment.
Rule 2(b) & (c) of the Central Excise Valuation (Determination of price of excisable goods) Rules, 2000
(b) normal transaction value means the transaction value at which the greatest aggregate quantity of goods are sold;
(c) value means the value referred to in section 4 of the Act;?
From the above narration, it is clear that the appellants have not produced any evidence whatsoever to support their assertion that they were selling the goods from the factory gate. From the assertion made by the appellant before the original adjudicating authority and Commissioner (Appeals), it is apparent that they have admitted the goods were sold through consignment agent. The definition of place of removal clause (iii) specifically covers premises of consignment agent as the place of removal. Rule 7 of the Central Excise Valuation (Determination of price of excisable goods) Rules, 2000 lays down the manner in which assessment needs to be done in these circumstances. Since the sole defence of the appellant that the goods were not sold at the factory gate is unsubstantiated and was never raised before the original adjudicating authority or before the first appellate authority, the same cannot be allowed to be raised at this stage especially when it is seen from the replies made by the appellant before the lower authorities that they had admitted the goods were sold from the premises of consignment agent. In view of the above, we do not find any infirmity in the manner in which the value has been arrived at by the lower authorities.
6. In so far as invocation of extended period of limitation is concerned, the appellants have argued that the transactions of selling of goods and payment of Central Excise duty are recorded and audited in books of account and balance-sheet. The appellants are required to assess the value in terms of Central Excise law on the basis of self assessment basis. In case the sales are made through consignment agent, it would not be in the knowledge of the Revenue. It is the duty of the appellant to clearly disclose that no sale is made from the factory but all the sales are made from the premises of the consignment agent. In view of clear provisions of law, the defence of the appellant fails and we are of the view that the extended period has been rightly invoked.
7. The appellant has also raised ground of revenue neutrality, it is not understood why and how it is revenue neutral situation. No evidence of revenue neutrality has been produced and this contention of the appellant is unsubstantiated.
8. In these circumstances, we do not find any merit in the appeal and the same is dismissed.
(Pronounced in Court on ... 19.02.2018.)
(D. M. Misra) (Raju)
Member (Judicial) Member (Technical)
Sinha
7
Appeal No. E/12045/16