2013 (11) TMI 875 - AT - Central Excise

Exemption notification no. 5/98 - use of power - Examination of chart and reply to the show cause notice - Quantum of demand of duty Revenue was of the view that the Goods manufactured at different factory and cleared from a different factory and the assesse took the wrong availment of the Benefit of Notification No. 5/98 Held that - The Commissioner has not considered the chart and has not given a categorical finding as to whether the traded goods were also included in the value of total clearance - the fact that the lacquered/polished sheets which were being cleared by the appellant, has also been held to be excisable goods by referring to the fact that appellant was paying the duty on the same in their unit located at C-18A cannot be appreciated - The same is not depending upon the fact that the assessee was himself clearing and paying the duty on the said sheets, may be on account of lack of knowledge but the issue is dependent upon the declaration of law by the Courts. Appellant relied upon METLEX (I) PVT. LTD. Versus COMMISSIONER OF C. EX., NEW DELHI 2004 (2) TMI 387 - SUPREME COURT OF INDIA which has to be considered by the Commissioner - In the case of subsequent confirmation of demands, benefit of Canvat credit has to be allowed to the assessee, subject to production of eligible Cenvat credit invoices Relying upon Formica India Division vs. CCE 1995 (3) TMI 98 - SUPREME COURT OF INDIA - Order set aside and the matter remanded back to the Commissioner to examine the chart prepared by the appellant and submitted to him along with reply to the Show cause notice Decided in favour of Assessee.

Summary

Issues:
- Dispute over the quantum of Central Excise duty demand on tin containers manufactured by the appellant.
- Consideration of traded goods in the total clearance value.
- Classification of lacquered/polished sheets as excisable goods.
- Availability of Cenvat Credit to the appellant.
- Interpretation of legal precedents regarding manufacturing processes and duty payment.

Analysis:
1. Quantum of Central Excise Duty Demand: The appellant, engaged in tin container manufacturing, disputed the quantum of duty demand. The appellant's advocate argued that even if goods were manufactured at a different factory, the duty amount should be recalculated. The Commissioner did not consider the appellant's chart showing computation errors, leading to a confirmation of the entire duty demand. The Tribunal emphasized the need for a thorough review of the demand calculation, citing legal precedents supporting the reevaluation of duty amounts post-confirmation.

2. Inclusion of Traded Goods: The appellant contended that the traded goods were not factored into the total clearance value. The Tribunal directed the Commissioner to examine the appellant's chart to determine if traded goods were considered in the duty demand calculation. The Tribunal highlighted the importance of accurately assessing the total value of clearances to avoid discrepancies in duty calculations.

3. Classification of Lacquered/Polished Sheets: The Revenue argued that the lacquered/polished sheets were excisable goods based on legal precedents and the appellant's duty payment on these sheets in a different unit. The Tribunal noted the need to differentiate between duty payment by the appellant and legal classification, referencing relevant case laws to guide the Commissioner's decision on the excisability of these sheets.

4. Availability of Cenvat Credit: The Revenue opposed granting Cenvat Credit to the appellant due to alleged wrongful benefit availed under a notification. The Tribunal emphasized the appellant's right to Cenvat Credit post-duty confirmation, subject to valid invoice production, citing legal precedents supporting the allowance of credit in such scenarios.

5. Interpretation of Legal Precedents: Both parties referenced legal judgments to support their arguments on manufacturing processes and duty payment criteria. The Tribunal acknowledged the relevance of legal interpretations in determining excisability and duty liabilities, directing the Commissioner to consider the appellant's submissions in light of established legal principles.

6. Decision: The Tribunal set aside the impugned order and remanded the matter to the Commissioner for a detailed review of the duty demand calculation based on the appellant's submissions. The Tribunal clarified that the appeal focused on duty requantification, allowing the Commissioner to reassess the issues raised by the appellant without expressing any views, ensuring a fair and comprehensive redetermination of the duty amount.