Custom, Excise & Service Tax Tribunal
Cce, Indore vs M/S.S. Kumars Ltd on 24 November, 2015
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI, PRINCIPAL BENCH NEW DELHI
Date of Hearing/ Decision:24.11.2015
Excise Appeals Nos.2737 and 2738 of 2006-EX(DB)
[Arising out of Order-in-Appeals Nos.IND-1/187-188/2006 dated 16.05.2006 passed by the Commissioner (Appeals-I), Customs & Central Excise, Indore]
CCE, Indore Appellants
Vs.
M/s.S. Kumars Ltd. Respondent
Appearance:
Rep. by Shri Govind Dixit, DR for the appellant. Rep. by Shri Rahul Tangri, C.A., for the respondent. For approval and signature:
Honble Smt. Sulekha Beevi C.S., Member (Judicial) Honble Shri B. Ravichandran, Member (Technical) 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 authoritative 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?
Coram: Honble Smt. Sulekha Beevi C.S., Member (Judicial) Honble Shri B. Ravichandran, Member (Technical) Final Orders Nos.53669-53670/2015 Dated:24.11.2015 Per B. Ravichandran:
These are two appeals by Revenue against Appellate order dated 16.05.2006 by the Commissioner (Appeals), Indore. The main Respondent (M/s.S. Kumars Ltd., Dewas) are engaged in the manufacture of processed man made fabrics. The second Respondent (M/s.S.Kumars Synfabs Ltd., Dewas) are merchant manufacturers, who supplied MM Grey fabrics and got the same processed from main Respondent. A dispute arose regarding valuation of processed grey fabrics for payment of central excise duty. Revenue felt that the manufacturing and other expenses were not properly allocated and added resulting in short levy of duty. Proceedings initiated against the Respondents resulted in original order dated 31.10.2005 confirming demand of Rs.4,19,012/- with equal amount of penalty against main Respondent and penalty of Rs.50,000/- on second Respondent. On appeal, the ld. Commissioner (Appeals) vide the impugned order allowed the appeals setting aside the original order. Aggrieved by this order, the Revenue is before us.
2. Ld. AR, Shri Govind Dixit, submitted that the Respondents failed to arrive at correct assessable value of processed fabrics in terms of principles laid down by Honble Supreme Court in Ujagar Prints [1989 (39) ELT 493 (SC)]. All expenses incurred on grey fabrics till it reaches the premises of the processor should be included in the value. He pleaded that the Respondents failed to consider allied expenses while declaring cost of grey fabrics. They have failed to produce CAS-4 certificates. Ld. AR also stated that earlier proceedings against the respondents are not relevant to the present case.
3. Ld. Consultant, Shri Rahul Tangri appearing for Respondents submitted that the Commissioner (Appeals) examined, in detail, the various issues involved in the valuation of processed grey fabrics and correctly set aside the original order. He pleaded that there is nothing in the present appeal to controvert the findings of the ld. Commissioner (Appeals).
4. We have heard both the sides and examined appeal records. The valuation of processed grey fabrics for excise duty is in dispute. The lower appellate authority examined the issue in detail. The period of dispute is March, 2000 to December, 2000. The Revenue built their case against Respondents based on balance sheet for the year 1997-98. On this ground alone, the proceedings against the Respondents have to fail. This much has been recorded by the lower appellate authority also. Even otherwise, on merit, we find no sustainable case for Revenue. The Respondents have submitted detailed work sheet with costing details. The various components for arriving at cost of grey and cost towards process loss, processing/packing charges have been specified. The cost of yarn is said to be based on prevailing market rate. The Original Authority held that the costing should have done only on actuals. However, while arriving at the figures for purported undervaluation the Revenue relied on Profit & Loss Account and Balance Sheet of second Respondent for cost of grey fabrics. Further, addition to the cost thus arrived was made towards freight, tax, insurance, commission, etc. again based on the said Balance Sheet. We find such exercise to arrive at assessable value for the impugned period is without any legal basis and arbitrary. We find that during the relevant period, there was no statutory requirement or Boards guidelines regarding submission of CAS-4 Certificate. The standards were incorporated through the Circular dated 13.02.2003 of the Board for future guidelines.
5. After careful consideration of the impugned order, we find no infirmity in the same. The appeals do not bring out any sustainable ground to interfere with the findings in the impugned order. Accordingly, we dismiss the appeals.
[Operative portion already pronounced in open court] ( Sulekha Beevi C.S.) Member (Judicial) ( B. Ravichandran) Member (Technical) Ckp.
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