2011 (2) TMI 1051 - AT - Central Excise

Captive consumption - demand of differential duty - yarn captively consumed - the appellant is discharging duty at spindle stage, on the basis of value arrived at on costing basis without adding profit margin - contention of the appellant that the goods captively consumed yarn is different than the yarn which are sold by them - Held that - Commissioner (Appeals) while disposing of the appeal filed by the Revenue, which is impugned before us the matter has been remanded back to the original adjudicating authority to reconsider the provision of Central Excise Valuation Rules, more specifically Rule 6(b)(i) or 6(b) (ii) as the case may be. In such a case of remand by the learned Commissioner (Appeals) to the adjudicating authority not to be interfere in the matter and pass an order on merit of the case. Matter needs to be adjudicated by the adjudicating authority keeping in mind the direction issued by the learned Commissioner (Appeals).

Summary

Issues:
1. Appeal against order-in-appeal for re-determining assessable value of yarn captively consumed.
2. Contention regarding difference between yarn captively consumed and yarn sold.
3. Remand by learned Commissioner (Appeals) to original adjudicating authority.
4. Direction to adjudicating authority to reconsider Central Excise Valuation Rules.
5. Sustainment of impugned order and remand back to adjudicating authority.

Analysis:
1. The appeal was filed against the order-in-appeal for re-determining the assessable value of yarn captively consumed by the appellant. The appellant was engaged in the manufacture of yarn, selling it in the open market, and also captively consuming the manufactured yarn. The lower authorities issued show-cause notices for demand of differential duty, which were dropped by the adjudicating authority. The Revenue appealed before the learned Commissioner (Appeals), who set aside the order-in-original and remanded the matter back to the adjudicating authority.

2. The main contention of the appellant was that the yarn captively consumed was different from the yarn sold, as the sold yarn underwent further processing. The appellant relied on a case law to support their argument. The learned Commissioner (Appeals) annulled the impugned order and allowed the appeal in principle, without a finding on the alternate path to be adopted, leaving it to the adjudicating authority to reconsider the Central Excise Valuation Rules.

3. The learned Commissioner (Appeals) remanded the matter back to the original adjudicating authority to reconsider the provisions of Central Excise Valuation Rules, specifically Rule 6(b)(i) or 6(b)(ii). The Tribunal did not interfere in the matter and passed an order on the merit of the case, directing the adjudicating authority to consider the issue afresh as per the directions of the learned Commissioner (Appeals).

4. Consequently, the impugned order was sustained, and the matter was remanded back to the adjudicating authority to be disposed of within three months from the date of the order, ensuring the principles of natural justice were followed before arriving at any decision. The appeal was disposed of accordingly.