2010 (6) TMI 444 - AT - Central Excise

Valuation captive consumption DR stated that the valuation of the goods to be done as per Rule 8 of the Valuation Rules 2000 and for that the appellants have to pay the excise duty on cost of production @115% - matter remanded for re-computation of the duty determination on the basis of CAS-4 as per Rule 8 of the Valuation Rules 2000

Summary

Issues involved:
Valuation of goods cleared between units, applicability of valuation rules, invocation of extended period for demand, imposition of penalties, correct formula for determining value, suppression of facts, re-computation of duty.

Valuation of goods cleared between units:
The case involved the valuation of goods cleared by one unit to another, where the appellants were alleged to have undervalued the goods. The issue was whether the valuation should be based on the 'cost of production' or the re-sale price of goods. The appellants argued that the price was determined based on the re-sale price at the receiving unit, which was higher than the valuation under the Valuation Rules. The Tribunal found that the correct formula for valuation was as per Rule 8 of the Valuation Rules, 2000, which required payment of excise duty on cost of production at 115%.

Invocation of extended period for demand and imposition of penalties:
The Tribunal considered the period involved in the case and found that a part of it was barred by limitation. It was noted that there was no suppression of facts as the appellants had disclosed all required particulars based on advice from the department. Therefore, the extended period was held not invocable, and the demand for the specific period was deemed unsustainable. Consequently, no penalty was levied on the appellants and co-appellants.

Re-computation of duty and remand to Commissioner:
The Tribunal agreed with the argument presented by the department that the valuation of goods should be done as per Rule 8 of the Valuation Rules, 2000. As a result, the Tribunal set aside the demand for the extended period, along with all penalties on the appellants. The matter was remanded back to the Commissioner for re-computation of the duty based on CAS-4 under Rule 8, where the appellants were directed to submit all necessary details within three months for the correct determination of duty payable.

In conclusion, the Tribunal disposed of the appeals by setting aside the demand for the extended period, penalties on the appellants, and remanded the matter back to the Commissioner for fresh adjudication in line with the directions provided in the judgment.