2004 (10) TMI 407 - AT - Central Excise

Summary

Issues:
Assessment of inputs cleared by the appellant, interpretation of Rule 3(4) of the Cenvat Credit Rules, applicability of Section 4 of the Central Excise Act, comparison with past judicial decisions, request for constitution of a Larger Bench.

Analysis:
The appeal concerns the assessment of inputs cleared by the appellant, M/s. Eicher Tractors, under Rule 3(4) of the Cenvat Credit Rules. The appellant, through their advocate, argued that the duty payable on removed inputs should be based on the value determined by the original manufacturer at the time of removal. They cited relevant provisions and past tribunal decisions to support their stance. However, the Departmental Representative contended that Section 4 of the Central Excise Act mandates determining the value at the time of removal. The Board's Circular was also referenced to emphasize the application of Section 4 for determining transaction value. The tribunal noted the purpose of the Cenvat Credit Scheme and the conditions specified in Rule 3(4) for the removal of inputs as such. It concluded that duty must be paid on the transaction value at the time and place of removal, as clarified by the Board's Circular.

The tribunal distinguished the present Rule 3(4) of the Cenvat Credit Rules from the earlier Rule 57F(1)(ii) of the Central Excise Rules, highlighting the change in provisions. It emphasized that the duty liability should be based on the value at which inputs are sold to customers, contrary to the appellant's argument. The tribunal referred to the caution by the Apex Court regarding reliance on past decisions without considering factual differences. Consequently, the tribunal deemed the appellant liable to pay duty based on the value at which inputs were sold to customers by their Marketing Division.

Given the conflicting views within the tribunal, the matter was referred to the Hon'ble President for the constitution of a Larger Bench. The proposed question for the Larger Bench pertains to whether duty on removed inputs should be calculated based on the original manufacturer's assessable value at the time of removal or the value at which the inputs are sold to customers, as per Rule 3(4) of the Cenvat Credit Rules. This question seeks clarity on the interpretation and application of the relevant provisions in resolving the dispute.

This comprehensive analysis delves into the core issues of the appeal, addressing the conflicting interpretations of Rule 3(4) of the Cenvat Credit Rules and the application of Section 4 of the Central Excise Act in determining the duty payable on cleared inputs. The tribunal's decision to seek a Larger Bench underscores the significance of resolving the interpretational discrepancies for consistent and fair adjudication in similar cases.