2015 (9) TMI 1336 - AT - Central Excise

Determination of assessable value - Removal of goods to sister concern - Imposition of penalty - Held that - In case the appellant has sold the goods to independent buyers as also to their sister concern, by adopting the same assessable value, the provisions of Rule 8 of Valuation Rules cannot be invoked in respect of clearances to sister concern. Though the appellant had taken a categorical stand to that effect, the said fact does not stand examined by the lower authorities. For the said limited purpose, we remand the matter to the original adjudicating authority for examining the said factual position and to decide the issue accordingly. Since Commissioner (Appeals) has not followed the law declared by the Larger Bench 2007 (2) TMI 5 - CESTAT, MUMBAI , we deem it fit to impose an exemplary cost of ₹ 2500/- for burdening the appellant for unnecessary litigation costs, for burdening the Tribunal as also for showing scant respect for the law declared by the higher authorities. - Decided in favour of assessee.

Summary

Issues:
1. Applicability of Rule 8 of Valuation Rules for clearances made to sister concern.
2. Ignoring the Tribunal's Larger Bench decision in the impugned order.
3. Failure to examine the factual position by the lower authorities.
4. Imposition of costs for unnecessary litigation.

Analysis:
1. The appellant, engaged in manufacturing sponge iron and billets, cleared goods to a sister concern at the same assessable value as independent buyers. The Revenue contended that the assessable value should be 110% of the cost of production for clearances to the sister concern. The appellant argued against the application of Rule 8 of Valuation Rules, citing the Tribunal's Larger Bench decision in Ispat Industries v. Commissioner. The Commissioner failed to address the appellant's submissions and ignored the relevant legal precedents, leading to a remand for further examination of the factual position.

2. The Tribunal emphasized the importance of following legal precedents set by Larger Benches to settle disputed issues and criticized the lower authorities for disregarding such decisions. The failure to consider established law not only results in unnecessary litigation costs but also shows a lack of respect for judicial authorities. By remanding the matter, the Tribunal aimed to ensure proper examination of the legal principles involved in the case.

3. Referring to the case of M/s. Ultratech Cement Ltd. v. Commissioner of Central Excise, the Tribunal highlighted the need for competent adjudication to serve the interests of the State effectively. Imposing costs on the Revenue and the Commissioner for disregarding legal precedents and burdening the appellant with unnecessary litigation costs, the Tribunal underscored the importance of upholding due process and respecting decisions made by higher authorities.

4. In conclusion, the Tribunal's judgment addressed the issues of proper application of valuation rules, adherence to legal precedents, examination of factual positions, and imposition of costs for unnecessary litigation. By emphasizing the significance of following established law and respecting judicial decisions, the Tribunal aimed to promote efficiency, fairness, and accountability in the adjudication process.