2011 (9) TMI 400 - AT - Central Excise

Interest and penalty - Goods cleared to sister concern - respondents are to pay duty on the basis of cost construction method as provided under Rule 6(b) of the Valuation Rules - respondents produced additional evidence by way of Cost Accountant s certificate which is not consistent with the data supplied to the department as stated above and the Commissioner (Appeals) after relying upon the evidence produced by the respondents set aside the demand - Held that - As Cost Accountant s certificate was not in consistent with the data furnished to the department, order set aside, Appeal disposed of by way of remand.

Summary

Issues involved: Appeal against order setting aside demand of duty based on cost construction method under Rule 6(b) of Valuation Rules for manufacturing HDPE/PP fabrics and sacks cleared to sister concern, reliance on CBEC Circular No. 258/92/96-CX, dispute over cost data, ex-parte order due to non-appearance of respondents, acceptance of Cost Accountant's certificate by Commissioner (Appeals), inconsistency in production data, remand for reconsideration.

Analysis:
1. Demand of Duty based on Cost Construction Method:
- The Revenue filed an appeal against the order setting aside the demand of Rs. 15,49,668/- along with interest and penalty, contending that duty liability on captively consumed goods should be discharged using the cost construction method under Rule 6(b) of the Valuation Rules. The Revenue relied on CBEC Circular No. 258/92/96-CX, emphasizing the need for duty payment based on the cost of production in the previous financial year. The adjudicating authority confirmed the demand, taking into account the cost data from the previous year. However, the respondents disputed this data, leading to the Commissioner (Appeals) accepting the contention based on a Cost Accountant's certificate.

2. Non-Appearance of Respondents and Ex-Parte Order:
- The adjudicating authority passed an ex-parte order as the respondents did not appear before them despite opportunities granted. Subsequently, before the Commissioner (Appeals), the respondents presented additional evidence in the form of a Cost Accountant's certificate. Although this certificate was accepted by the Commissioner (Appeals), it was found to be inconsistent with the data previously provided to the department, leading to a remand of the matter for reconsideration.

3. Remand for Reconsideration:
- The Tribunal found that the Cost Accountant's certificate was not consistent with the data furnished to the department, prompting a remand of the case to the adjudicating authority. The purpose of the remand was to reevaluate the evidence presented by the respondents and provide them with a reasonable opportunity to be heard. Consequently, the impugned order was set aside, and the appeal was disposed of by way of remand for further consideration.

In conclusion, the judgment highlights the importance of consistent data presentation, the need for parties to appear before the authorities, and the role of Cost Accountant's certificates in determining duty liability based on the cost construction method. The remand decision underscores the procedural fairness and the opportunity for parties to present their case effectively before the adjudicating authority.