2009 (3) TMI 802 - AT - Central Excise

Summary

Issues: Determination of correct Assessable Value under Central Excise Valuation Rules for excisable goods supplied on inter-unit transfer basis.

In this judgment by the Appellate Tribunal CESTAT, Mumbai, the issue at hand involves the determination of the correct Assessable Value of excisable goods supplied on an inter-unit transfer basis. The appellants, engaged in the manufacture of various goods, including motor vehicles and engine parts, were found to be calculating Central Excise duty based on cost components from previous years, rather than at the time and place of removal as required by Rule 8 and proviso to Rule 9 of the Central Excise Valuation Rules. The adoption of CAS-4 standards for determining Assessable Value in cases where goods are not sold but used for consumption in production was highlighted. The dispute revolves around the correct valuation of excisable goods as per Section 4 of the Central Excise Act, 1944, read with relevant rules, for the financial year 2006-2007.

The Tribunal considered a letter from the Deputy Director (Cost), Central Excise, Mumbai-I, verifying the cost of production of goods for captive consumption by sister units based on CAS-4 guidelines and certified statements for the year 2006-07. This letter was not before the Commissioner when the impugned order was passed. Consequently, the Tribunal remanded the case back to the Commissioner for reconsideration in light of this evidence and instructed to pass appropriate orders after hearing the appellants. The importance of considering all relevant documents and evidence before making a decision was emphasized.

Referring to a similar case involving another division of the appellants, where the matter was remanded for re-quantification of duty based on a report from the Deputy Director (Cost), Central Excise, Mumbai-I, the Tribunal set aside the Commissioner's order in the present case and allowed the appeal by way of remand. The stay petition was also disposed of accordingly. The judgment underscores the Tribunal's role in ensuring a fair and thorough consideration of all relevant factors in determining Central Excise duty liabilities, especially concerning the correct valuation of excisable goods supplied on an inter-unit transfer basis.