2016 (4) TMI 1024 - AT - Central Excise

Validity of assessment order - Clearance of runners and risers of Stainless Steel Grade EN-55 to their own unit at Bhandara and Nasik - Copy of enquiry report submitted by AD (cost) was not given to the appellant - Held that - the suggestion of AD (costs) that the value of production in question should be done at 110 - 115% of the highest market price was considered reasonable and the assessment was finalised under the provisions of Rule 11 of the Valuation Rule 2000. It is seen on the report of the AD (cost) has not been provided to the appellant before finalizing the assessment resulting in miscarriage of justice. Further more there is no reason forwarded for adopting 110 -115% of the highest market price as assessable value. Under these circumstances, the impugned order is set aside being non-speaking and passed without following principles of natural justice and the matter is remanded to the original authority for denovo adjudication after giving a copy of the report of the AD (cost) to the appellant.

Summary

Issues: Provisional assessment based on costing data, reliance on AD (Cost) report, principles of natural justice violation, assessment based on replacement value, jurisdiction of adjudicating authority, assessable value determination.

Provisional Assessment based on Costing Data:
The appellants, manufacturers of ferrous and non-ferrous castings, cleared goods to their own unit, leading to provisional assessment by the Revenue to determine the proper value. The Deputy Commissioner finalized the assessment after assistance from the Assistant Director (Cost) and a personal hearing. The Commissioner (Appeals) rejected the appeal, upholding the reliance on the AD (Cost) report for valuation. The Tribunal noted the Revenue's request for production cost data, the absence of which led to the extension of assessment period. The Tribunal found that the AD (Cost) report was not shared with the appellants, leading to a non-speaking order and a miscarriage of justice. The matter was remanded for fresh adjudication with the AD (Cost) report provided to the appellants.

Reliance on AD (Cost) Report and Principles of Natural Justice Violation:
The appellants argued that the original authority's reliance on the AD (Cost) data amounted to abdication of jurisdiction. They contended that the order violated natural justice principles as they were not provided with the market enquiry report or informed about the AD (Cost) advice. The appellants asserted that the Deputy Commissioner should have considered market values of similar goods, emphasizing the availability of nearly identical goods in the market. They presented a purchase order for stainless steel scrap as evidence of market prices. The Tribunal found the failure to provide the AD (Cost) report to the appellants as a violation of natural justice, leading to the order's setting aside.

Assessable Value Determination and Jurisdiction of Adjudicating Authority:
The impugned order determined the assessable value at "110 - 115% of the highest market price" based on the AD (Cost) suggestion, which the Tribunal deemed reasonable. However, the order lacked reasoning for this valuation method and failed to provide the AD (Cost) report to the appellants, resulting in a non-speaking order. The Tribunal set aside the order, emphasizing the need for principles of natural justice in assessable value determination. The matter was remanded for fresh adjudication, highlighting the importance of providing relevant reports to the parties involved for a fair decision-making process.