Custom, Excise & Service Tax Tribunal
Cce, Indore vs M/S Surya Roshni Limited on 18 October, 2016
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No.2, R. K. Puram, New Delhi. Date of hearing: 07.10.2016 Pronouncement on: 18.10.2016 Excise Appeal No. 949 of 2012 (Arising out of order-in-original No. 65/Commr/C.Ex. /Ind/2011 dated 27.12.2011 passed by the Commissioner, Customs and Central Excise, Indore). CCE, Indore Appellant Vs. M/s Surya Roshni Limited Respondent
Appearance:
Sh. G. R. Sharma, AR for the Revenue Sh. R. S. Sharma, Advocate for the Respondent - Assessee Coram:
Honble Justice (Dr.) Satish Chandra, President Honble Shri B. Ravichandran, Member (Technical) Final Order No. 54129 / 2016 Per: B. Ravichandran:
The Revenue is in appeal against order dated 27.12.2011 of Commissioner of Central Excise, Indore. The respondents-assessee are engaged in the manufacture of GLS bulbs etc. liable to Central Excise duty. During 2009-2010, the respondents-assessee transferred / sold their final products to their sister unit situated in Kashipur. The dispute in the present appeal relates to valuation of such items cleared to the sister unit. The case of the Revenue is that the value of Central Excise duty should have been done under Rule 4 and not under Rule 8 of Valuation Rules, 2000. It was argued that Rule 8 will apply only in case where the entire production of a particular commodity is captively consumed. In the present case, admittedly, not the entire production of the said goods were consumed in the sister unit. Accordingly, Revenue is contesting the findings of the original authority who dropped the demand for differential duty upholding valuation under Rule 8 adopted by the respondent-assessee.
2. We have heard both the sides and perused appeal records. As mentioned above, the only point for decision is the valuation of product cleared by the respondent-assessee to their sister unit. Admittedly, in the present case, the goods were sold to independent buyers as well as cleared to sister unit. The Revenue relied on the decision of Tribunal in Ispat Industries vs. CCE, Raigad - 2007 (209) ELT 185 (Tri. LB). We note the finding of original authority recorded as below:
10. The assessee in their letter dated 28.05.2011 addressed to the Additional Commissioner as also in a letter dated 07.07.2011 addressed to the Assistant Commissioner (Audit) Indore clarified that as per the Boards Circular No.634/34/2002-CX dated 01.07.2000 and Rule 8 of the Valuation Rules, they have transferred the goods to their sister concern correctly as per 110% of the cost of production on the basis of CAS-4 Certificate. They have also referred to the case laws in their support. The main point involved in this case is that the party is not transferring on payment of duty the final product from factory to their sister concern and not for sale therefrom. The reason for price difference in case of parts of the final product as explained by the party is that in case of transfer of components, they are not including selling expenses, marketing expenses, distribution expenses etc. which are the main ingredients of price in case components/ parts are sold to independent buyer. The case laws referred to in the Audit para appears not to be squarely applicable in this case as i the case of Ispat Industries Ltd. the issue of valuation decided by the Honble Apex Court relates to value at the time of import of the goods and not of clearance of indigenously manufactured goods. Similarly, Larger Bench of the CESTAT in the case of Ispat Industries Ltd. decided the issue relating to transfer of part of final product to sister concern and balance to independent buyers and not the parts & components of the final products as involved in the present case. Similarly, in the case of M/s Aquamall Water Solutions Ltd. the Honble CESTAT decided transfer of goods to certain brands to depot and sale therefrom and rest through unrelated buyers, therefore, valuation is to be determined by the best judgment.
3. We note that Rule 8 of Central Excise Valuation Rules, 2000 were substituted vide Notification No. 14/2013-CE (NT) dated 22.11.2013. The scope of the new Rule vis-`-vis the old rule was explained in the Board Circular dated 25.11.2013. It was clarified that the new provision was introduced which clearly state their application irrespective of whether the whole or a part of clearances of manufactured goods are covered by the circumstances given in the said rule. The Board further stated that these amendments in the rules addressed the issues clarified already vide Board Circular dated 01.07.2002. In other words, it is apparent that the provisions for application of 110% / 115% of cost of production to be adopted for valuation as all along been the same. The Honble Supreme Court in CCE, Mumbai vs. Fiat India Pvt. Ltd. - 2012 (283) ELT 161 (SC) held that a bare reading of Valuation Rules does not give any indication that the adjudicating authority while determining the value for duty of excisable goods had to follow the rules sequentially. The rules only provides for arriving at the assessable value under different contingencies.
4. Considering the above settled position of law, we find no reason to interfere with the findings of the lower authority. Accordingly, the appeal filed by the Revenue is dismissed.
(Pronounced on 18.10.2016).
(Justice (Dr.) Satish Chandra) President (B. Ravichandran) Member (Technical) Pant