Customs, Excise and Gold Tribunal - Bangalore
Hyderabad Cylinders Pvt. Ltd. vs Commissioner Of C. Ex. on 22 August, 2003
Equivalent citations: 2003(157)ELT466(TRI-BANG)
ORDER
S.S. Sekhon, Member (T).
The issue involved in this case is the assessment of goods manufactured on job work basis when similar or like goods were also manufactured and cleared by the assessee on his own account.
2. This appeal is coming for the second time. Earlier it was remanded back by this Bench of the Tribunal vide Final Order No. 934/2002, dated 19-7-2002 in Appeal No. E/812/01. By that order, this Bench had observed that the Id. Commissioner had not excluded the Modvat credit in determining the assessable values of the goods in question as the Certificate issued by the Chartered Accountant was not before the authorities below. The order-in-remand was made as per that order : -
"After hearing for sometime with reference to the stay application filed by the party, we find that the matter itself can be disposed off on the limited issue. Accordingly, amount required for hearing the appeal is dispensed with and appeal was taken for regular hearing with the consent of both sides.
2. Apart from the various issues, Mr. Sarabeshwara Rao, Id. Consultant submitted that Modvat credit as such has not been excluded in determining the assessable value of the goods in question. He fairly conceded that the correct Certificate issued by the Chartered Accountant was not produced before the authorities below, which resulted in not allowing credit. In view of this position, he requested that the matter may be remanded to the adjudicating authority to examine the issue afresh.
3. In view of this position, DR has no objection.
4. Concurring with the plea taken by both sides, the matter is remanded to the adjudicating authority to examine the issue afresh taking into consideration the correct certificate issued by the Chartered Accountant and to pass an order accordingly on providing an opportunity to the party. The appellants may make use of this opportunity and substantiate his claim on producing the certificate issued by the Chartered Accountant. All the other connected pleas are kept open. Thus, this appeal is disposed off in the above terms."
2. The Commissioner vide, the impugned order passed by him, has observed as regards the directions in remand, as follows :-
"15. It was not the case of Revenue that the value arrived at on the basis of costing and supported by Chartered Accountant Certificate was not acceptable for the reason that there was any mistake or lacuna in the costing. Therefore, it was not correct on the part of HCPL to have taken the stand before Hon'ble CEGAT, Bangalore that the adjudicating authority could not allow them the benefit of Modvat credit of duty paid on raw materials when the case was last adjudicated as there was an error committed in the Chartered Accountant's certificate earlier submitted by them. As already mentioned, since Hon'ble CEGAT, Bangalore was led to believe that a wrong Chartered Accountant's Certificate produced earlier resulted in justice not being done to HCPL, the case was remanded for re-adjudication on the basis of a revised and correct Chartered Accountant's Certificate to be submitted by HCPL. Since the case itself is not one of arriving at the correct assessable value on the basis of costing the question of referring to a revised and correct Chartered Accountant's Certificate is itself irrelevant to the case under consideration. The proposal has from the beginning been one of demanding differential duty with reference to normal price that was available in this case as against the value arrived at by HPCL on costing basis which was not necessary."
3. A perusal of the Final Order No. 934/2002, which we have taken the trouble of extracting in full, indicates that the findings of the Commissioner, as regards the directions in remand are not only Incorrect but exhibit a misunderstanding of the order in remand. The order in remand nowhere talks about an 'incorrect certificate'. The observations of the Commissioner '.....Hon'ble CEGAT, Bangalore was led to believe....' which almost amount to indicate that the Tribunal does not apply his mind and borders on contempt are not called for.
4. After hearing both sides and considering the order, now before us, it is found that the issue of valuation of goods made on job work basis has been settled. This Tribunal has been consistently holding that goods manufactured and cleared on job work basis have to be valued as per Hon'ble SC's order in Ujagar Prints reported in 1988 (38) E.L.T. 535 and 1989 (39) E.L.T. 493 as followed in the case of Kalyani Ferrous [2002 (148) E.L.T. 341 (T) = 2002 (51) RLT 822] and [2003 (156) E.L.T. 712 (T) = 2003 (57) RLT 27 (CEGAT - Bang.) in the case of Su-prajith Chem. Pvt. Ltd. and the following decisions :
(1) 2000 (123) E.L.T. 712 (Tri. - Chennai) - Sundaram Industries Ltd. v. CCE, Madurai (2) 1996 (63) ECR 380 (Tribunal) - CCE, Hyderabad v. Pharmasia Ltd.
(3) 2001 (47) RLT 249 (CEGAT - Mum.) - ITC Ltd. and Ors. v. CCE, New Delhi (4) 2000 (122) E.L.T. 71 (Tribunal) - Shah Foods Ltd. v. CCE, Ahmeda-bad (5) 2001 (47) RLT 607 (CEGAT - Chennai) - CCE, Coimbatore v. Dec-can Alloys Ltd. (6) 2002 (148) E.L.T. 341 (Tribunal) = 2002 (51) RLT 822 (CEGAT-Bang.) - Kalyani Ferrous (I) Ltd. v. CCE, Belgaum (7) 2002 (53) RLT 155 (CEGAT - Del.) - Akal Springs Ltd. and Anr. v. CCE, Chandigarh (8) 2000 (120) E.L.T. 24 (S.C.) - Pawan Biscuits Co. (P)Ltd. v. CCE, Patna (9) 2002 (141) E.L.T. 229 (T) = 2002 (49) RLT 187 (CEGAT - Bang.) -Loharu Steel Inds. Ltd. v. CCE, Bangalore (10) 2001 (42) RLT 249 (CEGAT) - CCE, Jaipur-II v. Modern Woolen Mills Ltd.
relied upon by the Id. Consultant in this connection confirms the view that valuation of the goods has to be resorted in the case of goods manufactured on job work basis only under the formula, laid down by the Apex Court in the case of Ujagar Prints (supra) case. In the present case, the Commissioner's attempt to stray from the law as laid down in the case of Ujagar Prints [1989 (39) E.L.T. 493 (S.C.)] and the Tribunal decisions in this regard, cited before him on the ground that LPG Cylinders manufactured on their own account by the appellants were similar in all respects to the LPG Cylinders manufactured on job work basis will not assist the Revenue's case to determine demands of duty, especially when the costing certificates are not being considered and are not found to be invalid and not depicting the valuation as per the Apex Court's Constitutional Bench decision in the case of Ujagar Prints. The Commissioner's order, therefore cannot be sustained and is required to be set aside.
5. The Id. DR for the Revenue submitted that the consideration of sale price of scrap generated in the manufacture of job work cylinders on raw material supplied by the traders and the consideration received by the appellants was not disclosed to the Department. The Id. Consultant stressed the point that the value of the raw material resulting in the alleged scrap was already reckoned in the costing of the raw material taken to work out the sale price of the cylinders and as per Ujagar Prints decision. Therefore, the sale value of the scrap cannot be once again included. It cannot be a reason or and cause to upset the formula of valuation to be adopted as per the Apex Court's decision. We find force in the submissions made by the Id. Consultant and in view of the fact that in spite of a specific direction to consider the costing certificate for the purposes of allowing the Modvat credit deductions as per Dai Ichi Karkaria Ltd, case [1999 (112) E.L.T. 353 (S.C.) = 1999 (33) RLT 899 (S.C.)] and the direction in remand given to the Commissioner in keeping the other issues open, it was incumbent of him to have found out the values as per the Apex Court decision and the factual data as regards the costing and thereafter determine the duty short paid, if any. The Commissioner has not opted to do so. He is led by the charges, as placed before him, proposing to value the goods on a different parameter. Such an order cannot be upheld.
6. In view of the facts found herein above, we would once again set aside this order and remand the matter back to the Commissioner to re-determine the duties short paid, if any, after considering the costing data in the facts of this case. The question of penalty, interest, etc., is required to be determined only after and keeping in mind the quantum of duties worked at short paid by determining the value for duty, by applying the Ujagar Prints formula read with the Supreme Court decision in the case of Dai Ichi Karkaria Ltd. [1999 (112) E.L.T. 353 (S.C.) = 1999 (33) RLT 899 (SC)].
7. The order is set aside and appeal allowed as remand for re-determination of the duties and fines and penalties, if any, thereafter.