2018 (7) TMI 1928 - AT - Central Excise

Valuation - captive consumption - Rule 8 of the Central Excise Valuation Rules (Determination of price of excisable goods), 2000 - revenue neutrality - HELD THAT - Although the valuation adopted by the appellant is not correct in view of the decision of Hon ble Tribunal in the case of ISPAT INDUSTRIES LTD. VERSUS COMMISSIONER OF C. EX., RAIGAD 2007 (2) TMI 5 - CESTAT, MUMBAI but it is fact that the adjudicating authority has not considered the issue of revenue neutrality - It has been held number of decisions where there is revenue neutrality situation there is no justification in issuing a confirming the demand as the whole exercise will be only academic one. The demand is required to be reconsidered and appropriate order is required to be passed considering the above judgement - Appeal allowed by way of remand.

Summary

Issues: Valuation of goods captively consumed by the appellant to their other units under Central Excise Act, 1944.

Analysis:
The appeal was filed against the Order-in-Original confirming the demand against the appellant under Section 11A (A) of the Central Excise Act, 1944, along with interest and penalty. The issue revolved around the valuation of goods captively consumed by the appellant in their other units. The appellant had adopted the cost construction method for valuation under Rule 8 of the Central Excise Valuation Rules, 2000. The appellant argued that the duty paid was availed as Cenvat credit under Cenvat Credit Rules, 2004, making the issue revenue neutral, which the adjudicating authority failed to consider. The appellant contended that the demand was not sustainable under the Central Excise Act. The Tribunal noted that while the valuation method adopted by the appellant was incorrect based on previous decisions, the issue of revenue neutrality was crucial. Citing various precedents, the Tribunal emphasized that in cases of revenue neutrality, confirming the demand would be an academic exercise. Therefore, the Tribunal set aside the impugned order and remanded the case for reconsideration by the adjudicating authority.