2007 (6) TMI 127 - AT - Central Excise

SCN - Commissioner(A) remanded the matter to the lower authority on the ground that in SCN the comparison of the goods cleared by appellant from the large scale unit instead of medium scale unit but appellant contended that the remand is beyond the scope of the SCN - Remand order is set aside

Summary

Issues:
1. Correct assessable value of goods under Rule 6 (b)(1) of Central Excise Valuation Rules.
2. Allegation of deliberate suppression of actual value of goods.
3. Demand of differential duty and penalty under Section 11AC of Central Excise Act.
4. Comparison of value of goods between differently placed Units.
5. Scope of remand order by lower appellate authority beyond show-cause notice.

Analysis:
1. The case involved determining the correct assessable value of goods under Rule 6 (b)(1) of the Central Excise Valuation Rules. The Department proposed fixing the assessable value based on data from large-scale Units, different from the appellant's classification as a medium-scale Unit. The original authority confirmed a demand of differential duty and imposed penalties. The appellate authority remanded the case for fresh orders, emphasizing the need for comparison with similarly placed Units.

2. The allegation of deliberate suppression of the actual value of goods cleared to a sister Unit led to the invocation of the extended period of limitation for demanding differential duty and imposing penalties under Section 11AC of the Central Excise Act. The lower authority confirmed the demand and penalties, which were contested in the appeal.

3. The appellant challenged the remand order of the lower appellate authority, arguing that it exceeded the scope of the show-cause notice. The appellant relied on a Tribunal decision setting aside a similar remand order that went beyond the proposal in the show-cause notice. The Tribunal examined the relevant show-cause notice, noting discrepancies in the classification of the appellant as a large-scale Unit when they were actually a medium-scale Unit.

4. The comparison of the value of goods between differently placed Units was a crucial aspect of the case. The Tribunal found that the lower appellate authority's direction to compare with medium-scale Units went beyond the scope of the show-cause notice. The Tribunal cited a similar case where directions beyond the show-cause notice were set aside, leading to the allowance of the appellant's appeal in this case.

5. Ultimately, the Tribunal set aside the impugned order and allowed the appeal, emphasizing that the lower appellate authority's remand order exceeded the scope of the show-cause notice. The decision was based on the principle that directions in a remand order should align with the proposal in the show-cause notice to ensure procedural fairness.