2015 (2) TMI 1075 - AT - Central Excise

Differential Duty demand - Determination of assessable value - exemption under notification no.50/03-CE dated 10.06.2003 - Department determined the assessable value on the basis of annual cost of production based on CAS-4 format and compared the same with the assessable value adopted for each month and in whichever month, lesser value had been adopted resulting in lesser payment of duty, differential duty has been demanded - Held that - Appellant were also determining the cost of production for the entire financial year in CAS-4 format and if the assessable value determined on the basis of this cost of production was more than the assessable value adopted during certain months resulting in lesser payment of duty, they were paying the differential duty after adjusting the extra payment of duty, if any, during the other months. It is contention of the appellant that if the payment of duty made by the appellant on their own is taken into account, there would be no duty demand. - appellant have taken specific plea that they were preparing annual CAS-4 certificate and were paying the duty on shortfall, if any, after adjusting the excess duty paid by them in some of the months. There is no finding on the above plea of the appellant. If the appellant have actually paid the differential amount of duty, the same would lead to a situation where no duty liability would arise against the assessee. In view of this, this matter has also to be remanded to the Commissioner with the same directions. - matter remanded back - Decided in favour of assessee.

Summary

Issues:
- Duty demand based on assessable value determination
- Time limitation for issuing show cause notice

Analysis:

Issue 1: Duty demand based on assessable value determination
The appellant, engaged in manufacturing detergent soaps and noodles, cleared goods to their unit availing duty exemption. The Department determined assessable value based on annual cost of production, resulting in a duty demand of Rs. 3,18,51,841. The appellant argued they paid differential duty after adjusting excess payments, but this plea was not considered. The Tribunal noted a similar case where the appellant's plea led to no duty liability. The matter was remanded for de novo adjudication, emphasizing the need to consider the appellant's submissions regarding differential duty payments and assessable value determination.

Issue 2: Time limitation for issuing show cause notice
Although the dispute pertained to 2011-2012, the show cause notice was issued in 2013, beyond the normal limitation period. The appellant contended that earlier show cause notices and delays in furnishing information justified the delay. Citing relevant judgments, the appellant argued the duty demand was time-barred. The Commissioner, without considering these judgments, applied the extended limitation period. The Tribunal set aside the impugned order, remanding the matter for fresh consideration. The Commissioner was directed to assess whether the extended limitation period was applicable in light of the cited apex court judgments.

In conclusion, the Tribunal remanded the case for a fresh adjudication, instructing the Commissioner to consider the appellant's arguments regarding differential duty payments and the applicability of the extended limitation period. The judgment highlighted the importance of evaluating all relevant factors in determining duty demands and issuing show cause notices within the prescribed time limits.