2015 (10) TMI 2522 - AT - Central Excise

Whether the impugned order has examined that dispute in the present matter in the light of the direction issued by this Tribunal - adjudicating authority has approved the action of the Board in amending the anomaly in the circular of 25th April 2005 by circular of 16th June 2005 and has invalidated the decision of the Larger Bench in re Eicher Tractors 2005 (9) TMI 340 - CESTAT NEW DELHI - Commissioner has not discharged the directions of the remand - Held that - The Larger Bench was seized of the earlier decision of the Tribunal in re Eicher Tractors holding that fresh valuation at the time of removal would not be in conformity with the statute as the goods have already borne the burden of duty of excise. Further the genesis of the reference to the Larger Bench was also a matter of consideration. Above all else was the factum of rescinding of the erstwhile Central Excise Rules 1944 with effect from 1st July 2001 and subsequent notification of the CENVAT Credit Rules 2002. Taking note of a clarification issued by the Central Board of Excise & Customs in circular no. 6/39/2000-CX-I dated 1st July 2002 for handling removal of inputs effected under erstwhile provisions by categorizing them for determining value under section 4 of Central Excise Act 1944 and the subsequent clarification in circular no. 813/10/2005 dated 25th April 2005 the Larger Bench confirmed that the latter prevailed and continued to prevail notwithstanding the circular of 16th June 2005 in view of the superceding nature of the clarification issued in April 2005. It was not open to the adjudicating Commissioner to go beyond the decision of the Larger Bench unless it was distinguishable. There is no finding by the Commissioner to that effect. he appellant had reversed the credit of duty taken or paid equivalent amount and was thereby in conformity with Rule 3(5) of CENVAT Credit Rules 2004 as applicable to earlier clearances. This is in conformity with the ruling of the Larger Bench supra. - Decided in favour of appellant

Summary

Issues: Duty liability on inputs cleared from the factory, application of Central Excise Rules, challenge to the assessment order, compliance with tribunal directions, validity of adjudicating authority's actions.

The judgment by the Appellate Tribunal CESTAT, Mumbai involved a dispute concerning duty liability on inputs cleared from a manufacturing facility. The appellant, engaged in biscuit manufacturing, had procured inputs with duty credits and removed some between January and December 2001. The duty liability was disputed by the authorities, citing rules such as Rule 57AB(1B), Rule 57AB(1C), and Rule 3(4) of the Central Excise Rules, 2000. Initially, the Commissioner confirmed the demand, leading to an appeal and remand for reconsideration in light of a decision in Eicher Tractors v. Commissioner of Central Excise. The subsequent order confirmed the demand, leading to the current appeal.

In the appeal, it was argued that the value of clearances was wrongly enhanced for duty computation, the rules were misapplied as the goods were transferred to job-workers, and there was a lack of assessment of the input production cost. Reference was made to previous tribunal decisions for support. The adjudicating authority's actions were questioned, particularly regarding the amendment of circulars and the disregard of tribunal directions. The tribunal observed a lack of compliance with the remand directions.

The key issue was whether the impugned order considered the dispute in line with tribunal directions. The tribunal highlighted the significance of previous decisions, the rescinding of old rules, and the introduction of new rules. It emphasized the importance of adhering to tribunal decisions, especially in the absence of distinguishing factors. The appellant's compliance with Rule 3(5) of CENVAT Credit Rules, 2004 was noted, aligning with the Larger Bench's ruling.

Ultimately, the tribunal set aside the impugned order and allowed the appeal, emphasizing the importance of adherence to tribunal directions and the correct application of rules in duty liability disputes.