2012 (7) TMI 535 - AT - Central Excise

Valuation of final products alleged that the appellant has under valued the goods i.e. by understating raw material s cost and by doing so, they have not discharged the correct duty liability appellant produced Chartered Accountant s certificate lower authority recording that the said Chartered Accountant s certificate is for the finished goods without having any cost data and showing details of raw materials price and other expenses etc Held that - Professional s certificate cannot be summarily dismissed, as the said professional, in this case, Chartered Accountant must have gone through the accounts and entire records produced before him. If the lower authorities had any reason to disbelief the said certificate, they should have called for an explanation from the appellant and who could have given the explanation from the Chartered Accountant himself - approach of the first appellate authority inconsistent with the law - order set aside and matter remanded back to the adjudicating authority to reconsider the issue afresh - Appeal is allowed by way of remand.

Summary

Issues involved:
Valuation of final products for levy of Central Excise duty based on Chartered Accountant's certificate, rejection of certificate by lower authorities, correctness of valuation of bulk oil, need for reconsideration of valuation based on new evidence.

Analysis:
The appeal pertains to the valuation of final products, Parachute Jasmine and Parachute Sampoorna, manufactured by the appellant for M/s. Marico Industries Limited for the period March 2002 to November 2003. The issue revolves around whether the appellant under-valued the goods by understating the raw material cost, leading to incorrect discharge of excise duty liability. Both lower authorities found discrepancies in the valuation based on a Chartered Accountant's certificate provided by M/s. Marico Industries Limited. The appellant argued that the certificate was summarily rejected without proper findings and that the first appellate authority erred in not seeking further details or explanations.

Upon review, the Tribunal observed that the issue at hand is the correct valuation of the bulk oil, specifically refined coconut oil, used in manufacturing the products. The appellant relied on the Chartered Accountant's certificate for valuation, while the lower authorities determined a different value based on evidence from the goods transfer note cum challan of M/s. Marico Industries Limited. The Tribunal noted that the first appellate authority dismissed the certificate without sufficient reasoning, highlighting that a professional certificate should not be summarily rejected. The Tribunal emphasized the need for a fair and thorough review process, suggesting that if there were doubts about the certificate, the authorities should have sought clarification from the appellant or the Chartered Accountant directly.

In light of the procedural irregularities and the need for a more detailed examination, the Tribunal set aside the lower order and remitted the matter back to the adjudicating authority for a fresh consideration. The Tribunal directed the adjudicating authority to reevaluate the evidence presented by the appellant, ensuring adherence to the principles of natural justice. The Tribunal clarified that it was not expressing any opinion on the merits of the case but emphasized the importance of a fair and comprehensive review process. Therefore, the appeal was allowed by way of remand, keeping all issues open for reconsideration.