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Appearance:

Shri Gajendra Jain, Advocate, for appellant Shri V.K. Agarwal, Additional Commissioner and Shri Sanjay Hasija, Superintendent (ARs), for respondent CORAM:
Hon'ble Mr. Ramesh Nair, Member (Judicial) Hon'ble Mr. Raju, Member (Technical) Date of Hearing: 24.4.2018 Date of Decision: 28.6.2018 ORDER No. A/86853-86854/2018 Per: Ramesh Nair The brief facts of the case are that the appellant are engaged in the manufacture of Mild Steel Drums (M.S. Drums) and barrels for Hindustan Petroleum Corporation Ltd. (HPCL) and Bharat Petroleum Corporation Ltd. (BPCL) on job work basis for which HPCL and BPCL raised the purchase order. The appellant are entitle for receiving conversion charges

2 E/357/2009,85606/2016 against such job work. HPCL and BPCL supplied the duty paid CRS sheets to the appellant, on which they have availed Cenvat credit on the duty paid on such CRS sheets. The appellant converted CRS sheets into MS Drums. They paid excise duty on the drums by valuing them as per the judgment of Ujagar Print i.e. on the value equal to cost of raw material plus job charges. The excise duty paid by the appellant on M.S. drums was availed as Cenvat credit by HPCL and BPCL. These drums were used by the HPCL and BPCL to pack and clear their dutiable product i.e. bitumen. In some purchase orders appellant purchased lid from the market and supplied them to HPCL for the month of March, 1999 and From April 2001 to March 2007 and to BPCL for the period From April, 2003 to May, 2007 and applied for provisional assessment since landed cost of CRS sheets and fabrication cost was not known to the appellant at the time of removal. Once the C.A. certificate issued by HPCL and BPCL, appellant filed final price list with the department for finalisation of provisional assessment, wherever final value computed by the appellant was higher than the provisional value adopted at the time of removal, Appellant paid the differential duty and interest. The Asstt. Commissioner finalised the provisional assessment for the clearance made during the period April 1997 to June 2007. As 3 E/357/2009,85606/2016 per the said Order-in-Original, the differential duty payable was Rs. 53,53,028/-. However, the Commissioner vide Order-in-Original directed appellant to pay differential duty of Rs. 75,40,706/- along with interest. As per the order demand was confirmed on four counts:

(II) Cost of (a) The Appellants submit that Lids they have already included cost of lid in the fabrication charges which is forming part of assessable value. This is evident from the illustrative purchase order of BPCL (Annexure-1) read with CA certificate of BPCL (Annexure-

2) for the year 2002-03. Hence, the demand on account of lid cost is clearly duplication and not sustainable.

(d) Whether the value of the scrap retained by the appellant and realised proceeds by selling scrap in the market can be added in the assessable value of the drums.

6. As regard the different rates taken by the Revenue for unit cost of drums, fabrication cost and lid cost. We find that in order-in-original the adjudicating authority has taken different cost of raw material and the duty was re-quantified by enhancing from Rs. 75,40,706/- - which was originally confirmed to Rs. 2,31,30,925/. Firstly the unit cost per drum was given by the C.A. of BPCL and HPCL. The department has not adduced any evidence which is contrary to C.A. certificate provided by HPCL and BPCL therefore the unit per cost provided by BPCL and HPCL has to be accepted. Moreover, in the first order of finalisation of provisional assessment total duty demand was confirmed for an amount of Rs. 75,40,706/- against which the appellant had filed appeal, however no appeal was filed by the Revenue therefore even though the Commissioner(Appeals) had remanded the matter to the adjudicating authority it was not open for the adjudicating authority to increase the demand of Rs. 75,40,706/- as Revenue was not 22 E/357/2009,85606/2016 aggrieved with finalisation of assessment order which demanded Rs. 75,40,706/- therefore the enhancement of the demand from Rs. 75,40,706/- to Rs. 2,31,30,925/- is absolutely illegal and without any authority of law as held by the Hon'ble Bombay High in case of Su. Jewel Exim Pvt Limited vs UOI [2010(253)ELT 713(Bom)]. Hon'ble Court held as under: