2014 (12) TMI 1132 - AT - Central Excise

Valuation of goods - Undervaluation - MRP based valuation of ceramic tiles - Demand of differential duty - Held that - For the period prior to 1.3.2008, the provisions of Section 4A will be applicable and there is being no prescribed valuation rules under the said Section, the MRP/RSP cannot be re-determined; for the period post 1.3.2008, the value needs to be re-determined as per the valuation rules prescribed under Section 4A of Central Excise Act 1944, for which we remand the matter back to the lower authorities to follow the direction given by this Bench in the case of Acme Ceramics & Others (2014 (3) TMI 164 - CESTAT AHMEDABAD). Confirmation of the duty liability as indicated hereinabove needs to be upheld; as appellant-assessees are not contesting the demand on the clandestine removal as has been confirmed by the adjudicating authority. As we are upholding the confirmation of the demand on the clandestine removal of the goods, we uphold the interest liability and equivalent penalty under Section 11AC of Central Excise Act 1944. We also state that wherever the adjudicating authority has not extended the benefit of discharge of penalty @ 25% of the confirmed duty liability, the same is extended to those assessees - Decided partly in favour of assessee.

Summary

Issues involved: Valuation of ceramic tiles for duty evasion and clandestine removal.

Analysis:
1. The appeals raised a common issue of valuation of ceramic tiles for duty evasion. The Revenue alleged that the appellants undervalued the tiles to evade duty and engaged in clandestine removal.
2. The issue was divided into two periods: before and after 1.3.2008. The Revenue claimed that the appellants incorrectly declared the MRP on the packages, necessitating a re-determination of the value.
3. The Revenue appealed against the first appellate authority's decision, relying on the Acme Ceramics case. The appellants argued that the issue was covered by the Acme Ceramics judgment and contested the allegations of clandestine removal.
4. The Tribunal found that the cases stemmed from a common investigation, with some show cause notices already adjudicated in the Acme Ceramics case. The Tribunal held that the Acme Ceramics judgment applied to all appeals, rejecting the applicability of the Snider Electricals case due to differing factual positions.
5. The Tribunal ruled that for the period before 1.3.2008, Section 4A provisions applied without prescribed valuation rules, preventing re-determination of MRP/RSP. For the period after 1.3.2008, valuation rules under Section 4A were to be followed, remanding the matter for compliance with the Acme Ceramics judgment.
6. Regarding clandestine removal, the Tribunal upheld the duty liability for non-contesting assesses, confirming the demand, interest, and penalty as per the adjudicating authority's decision and extending penalty discharge benefit as per a High Court judgment.
7. The Tribunal disposed of all appeals accordingly, upholding duty liability for clandestine removal and applying the Acme Ceramics judgment for valuation issues.

This comprehensive analysis covers the issues of valuation for duty evasion and clandestine removal addressed in the judgment by the Appellate Tribunal CESTAT Ahmedabad.