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2015 (5) TMI 24 - AT - Central ExciseDuty under Compounded Levy Scheme - Notification No. 16/2001-CE (NT) dated 30.4.2001 - demands of differential duty - Whether the original value of investment in plant and machinery of the appellant is above ₹ 3 Crore or not for being eligible to voluntary Compounded Levy Scheme under the provisions of Rule 96ZNA to 96ZND (Section ExA) of the Central Excise Rules, 1944 - Held that - It is revealed from the records that the appellant filed application in proper form ASP-I duly certified by the Chartered Accountant as required under Rule 96ZNB (I) of the erstwhile Rule 1944. By a letter dated 02.7.2001, the appellant was asked as to why their application under Rule 96ZNA should not be rejected as the Deputy Commissioner of Central Excise verified and reported on the basis of Balance Sheet the original value of plant and machinery was more than three crores. Once the competent authority who is technically qualified to tender opinion in relation to the technical standards prescribed under the provisions of Food Adulteration Act and Rules thereunder has tendered his opinion it would not be open to any one to take a contrary stand, unless and until such technical opinion is displaced by specific and cogent evidence in the form of another technical opinion. Merely by approaching the matter by stating that the goods could be converted into palm oil of edible grade by carrying out certain processes, the respondent No. 3 who is an officer of the department cannot displace the report of technical expert, nor can he insist that inspite of such report the importer must establish that end-use of the product shall not be other than one as regards entry in which the goods admittedly fall at the time of import. Adjudicating authority was not justified in rejecting the valuation done by a Chartered Accountant when it is subsequently also certified that the valuation is done as per Accounting Standards-10. The adjudicating authority was not right in deciding the original valuation of plant and machinery himself, in the absence of any contrary expert opinion. - Decided in favour of assessee.
Issues Involved:
1. Eligibility of the appellant to pay duty under the Compounded Levy Scheme. 2. Interpretation of amendments to the Compounded Levy Scheme. 3. Validity of the valuation of plant and machinery certified by a Chartered Accountant. 4. Authority of the adjudicating authority to reject the Chartered Accountant's valuation. Detailed Analysis: Issue 1: Eligibility of the appellant to pay duty under the Compounded Levy Scheme The appellant, M/s. Shyam Textile Mills, filed an appeal against the rejection of their option to pay duty under the Compounded Levy Scheme as per Rule 96 ZNA of the Central Excise Rules, 1944. The adjudicating authority had rejected this option based on the assessment that the original value of the appellant's plant and machinery exceeded Rs. 3 crore, thereby disqualifying them from the scheme. Issue 2: Interpretation of amendments to the Compounded Levy SchemeThe appellant argued that the amendments introduced by Notification No. 23/2001-CE (NT) dated 28.6.2001, which were effective from 01.7.2001, should not apply retroactively to their case. The Supreme Court had remanded the case to CESTAT to decide the issue on merits. The Tribunal referred to the Rajasthan High Court's judgment in Sulzer Processors Pvt. Limited vs. CCE, which clarified that the amendments were clarificatory and thus applicable to the original notification for determining the value of plant and machinery. Issue 3: Validity of the valuation of plant and machinery certified by a Chartered AccountantThe appellant submitted that they had filed the required declaration under Rule 96ZNB, certified by a Chartered Accountant, stating the original value of their plant and machinery. They argued that the adjudicating authority could not reject this certification based on its own interpretation. The Tribunal noted that the appellant had provided a subsequent certificate from the same Chartered Accountant, confirming that the valuation was done as per Accounting Standard 10 (AS-10). Issue 4: Authority of the adjudicating authority to reject the Chartered Accountant's valuationThe Tribunal observed that the adjudicating authority had estimated the original value of the plant and machinery on its own, based on a verification report from the Deputy Commissioner. The Tribunal held that the adjudicating authority could not override the certification done by a Chartered Accountant as per the Accounting Standards. The Tribunal cited the Gujarat High Court's judgment in Inter Continental (India) vs. UOI, which emphasized that a technical opinion by a competent authority could not be displaced without specific and cogent evidence from another technical expert. Conclusion:The Tribunal concluded that the adjudicating authority was not justified in rejecting the valuation certified by the Chartered Accountant and deciding the original value of the plant and machinery on its own. The appeals filed by the appellant were allowed, and the Tribunal did not consider other aspects of the appeals as the primary issue was decided in favor of the appellant. Judgment:Appeals filed by the appellant are allowed. Pronounced in the open Court on 27.04.2015.
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