9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (4) TMI 233 - AT - Central ExciseValuation of goods cleared to own sister units for captive consumption - Determination of the cost of production as per CAS-4 - differential duty demand and interest - Enhancement of value as per the cost audit submitted by Dy. Director (Cost) - Held that - The adjudicating authority has correctly determined the cost of production of copper anodes manufactured by the appellants. We find that the adjudicating authority has not merely or plainly adopted the DD (Cost) report for addition of the cost elements under CAS-4 and the very fact that the adjudicating authority has over ruled on six items for disallowing the addition proposed by the DD (Cost) and allowed the addition clearly shows that he has applied his mind and the direction of this Tribunal orders and correctly determined the cost as per CAS-4 for copper anodes as ₹ 94,446/- and ₹ 94,594 per MT as against the DD (Cost) proposal of ₹ 1,30,802.38 and ₹ 1,32,738.80 per MT. We also find that during the proceedings the appellant s cost auditor was also represented and submitted cost certificate. Considering the period of dispute and taking into the original demands as proposed in the four SCNs the demand amount of ₹ 251 Crores has been scaled down on account of the directions by this Tribunal s Two Final orders, and the original demand reduced to ₹ 13.98 Crores. Therefore, we hold that the appellant s contention for remanding the case to the adjudicating authority is not justifiable except to delay the proceedings without any valid grounds. The appellants pleading for Revenue neutrality is also not justified and we find all along they never claimed this aspect in the initial proceedings when the demand was confirmed by the Commissioner and when the case was before this Tribunal twice. Therefore, we hold that there is no justification for their claim on Revenue neutrality. Therefore, taking into account all the above facts, we uphold the impugned order in determining the cost of copper anodes for the period July 2001 to March 2002 as ₹ 94,446/- per MT and ₹ 94,594/- per MT for the period April 2002 to October 2002. Consequently, the demand of ₹ 13,98,95,514/- and interest thereof is liable to be upheld. Disallowance of adjustment of excess duty paid - as contended that since the assessment is provisional while finalizing provisional assessment, the LA ought to have taken into account the excess duty paid on copper anodes and adjust the same against the total duty payment before arriving the differential duty - Held that - We find that the adjustment was denied by the LAA and held that the appellants had passed on the duty element to their other unit at Silvasa, who in turn availed the Cenvat credit for the central excise duty paid by the appellant. Further, we find that since the facts have already been admitted before the adjudicating authority and LAA, they have admitted that they have already availed cenvat credit on the duty paid on copper anodes at their unit at Silvasa and they have also admitted before LA that they will not claim any refund on this account. Therefore the appellant s claim for adjustment and claiming automatic set off excess duty paid does not arise. Determining the cost of copper anodes - Commissioner (Appeals) order to that extent allowing deductions on 5 items is liable to be set aside and the OIO passed by the adjudicating authority is liable to be upheld. Consequently, the determination of value is restored to ₹ 99,742 per MT as per OIO and the original demand confirmed of ₹ 6,20,14,457 in OIO is upheld. The impugned order is set aside and the Revenue appeal is allowed to that extent. Penalty of ₹ 25 lakhs imposed under Rule 25 - Held that - As we find that the adjudicating authority has already dropped Section 11AC penalty and taking into overall facts and circumstances of the case and taking into consideration that the issue is being debated from 1997 onwards, and also considering the Tribunal s two remand orders, the penalty under Rule 25 is not imposable. Accordingly, we waive penalty of ₹ 25 lakhs imposed under Rule 25 of CER.
Issues Involved:
1. Change of cause title. 2. Valuation of copper anode. 3. Provisional assessment. 4. Foreign exchange fluctuation. 5. Difference in CC consumption. 6. Power and fuel charges. 7. ISO-TQM charges. 8. Sale value of sulphuric acid. 9. Professional fee and testing charges. 10. Duty drawback. 11. LC charges. 12. Excess sale value of sulphuric acid. 13. Difference in RM consumption. 14. Penalty under Rule 25 of CER. 15. Adjustment of excess duty paid. Detailed Analysis: 1. Change of Cause Title: The appellant requested a change of cause title from M/s. Sterlite Industries (I) Ltd. to M/s. Sesa Sterlite Limited and subsequently to M/s. Vedanta Limited. The Tribunal allowed this change based on the merger and renaming approved by the High Courts of Goa and Madras. The applications for change of cause title were disposed of accordingly. 2. Valuation of Copper Anode: The core issue involved the valuation of copper anodes manufactured by the appellant and cleared to their sister units. The appellant used the cost construction method for determining the assessable value under the Central Excise Valuation Rules. The Tribunal had previously directed the valuation to be determined as per CAS-4 guidelines. 3. Provisional Assessment: The appellant claimed the provisional assessment was effective from 01.11.1999, but the adjudicating authority held it was from 01.11.2002. The Tribunal upheld the adjudicating authority's decision, stating there was no provisional assessment prior to this period. 4. Foreign Exchange Fluctuation: The adjudicating authority added Rs. 1,19,24,360/- to the cost of raw materials due to foreign exchange fluctuations. The Tribunal upheld this inclusion, finding that the difference in amounts between provisional and final invoices was not purely on account of foreign exchange fluctuation but also due to changes in parameters such as copper content and moisture percentage. 5. Difference in CC Consumption: The adjudicating authority's findings on the difference in CC consumption were upheld, as the appellant failed to provide sufficient justification for the figures shown in the trial balance. 6. Power and Fuel Charges: The adjudicating authority added Rs. 4,92,42,218/- for power, fuel, and water charges based on figures from the trial balance. The Tribunal upheld this addition, noting the appellant's failure to justify the amounts shown in the trial balance. 7. ISO-TQM Charges: The appellant did not contest the inclusion of ISO-TQM charges in the cost of production. 8. Sale Value of Sulphuric Acid: The adjudicating authority included the sale value of sulphuric acid in the cost of production. The Tribunal upheld this inclusion, finding that the sale value was not deducted twice as claimed by the appellant. 9. Professional Fee and Testing Charges: The appellant did not contest the inclusion of professional fees and testing charges in the cost of production. 10. Duty Drawback: The adjudicating authority allowed the deduction of Rs. 69,89,47,034/- for duty drawback based on SION norms but included Rs. 79,67,940/- in the cost. The Tribunal upheld this decision, noting that the norms were fixed by the DGFT and were binding. 11. LC Charges: The inclusion of LC charges in the cost of production was upheld by the Tribunal. 12. Excess Sale Value of Sulphuric Acid: The appellant did not contest the inclusion of the excess sale value of sulphuric acid shown in the P&L account. 13. Difference in RM Consumption: The adjudicating authority's findings on the difference in RM consumption were upheld, as the appellant failed to provide sufficient justification. 14. Penalty under Rule 25 of CER: The adjudicating authority imposed a penalty of Rs. 25 lakhs under Rule 25 of CER. The Tribunal waived this penalty, considering the long-standing nature of the dispute and the Tribunal's previous remand orders. 15. Adjustment of Excess Duty Paid: The appellant's request for adjustment of excess duty paid was denied by both the adjudicating authority and the Tribunal. The Tribunal found that the appellant had already availed Cenvat credit on the duty paid at their Silvasa unit and had admitted they would not claim a refund on this account. Conclusion: - The Tribunal upheld the adjudicating authority's determination of the cost of production as per CAS-4 and the differential duty demand of Rs. 13,98,95,514/- with interest. - The penalty under Rule 25 of CER was waived. - The appellant's second appeal for adjusting excess duty paid was rejected. - The Revenue's appeal was allowed, restoring the original demand confirmed by the adjudicating authority.
|
