2016 (5) TMI 991 - AT - Central Excise

Valuation with respect to deductions/additions of Bank charges, Interest in Excess of CSD, Advertisement & Sales Promotion, Below the line expenses (BTL) & interest on Trading and quantification of duty - Cigarettes and smoking mixture - assessments were kept provisional due to pending post manufacturing expenses (PME) - excess recovery of amounts by wholesale Dealers a part of which was also reaching the appellant. Held that - it is observed from the case records that issues of valuation dispute relating to Bank charges, Interest in Excess of CSD, Advertisement & Sales Promotion, Below the line expenses (BTL) & interest on Trading have been decided by Jurisdictional Adjudicating authorities at Bangalore, Parel, Saharanpur & Kidderpore factories in the light of ratio laid down by Apex Court . It is submitted by the Advocate of the appellant that orders passed by the above adjudicating authorities have been accepted by the department on these deductions/additions and also the method of quantification. This fact can be verified by Adjudicating authority of Munger factory and if what is stated by the Learned Advocate of the appellant is found to be true then the same ratio laid by other jurisdictional adjudicating authorities has to be followed by AC/DC in charge of Munger factory, including the method of quantification of differential duty. This bench has not made any observations on the merits of the case. The same has to be decided by the Adjudicating authority on the basis of orders passed by adjudicating authorities at Bangalore, Parel, Saharanpur and Kidderpore factory and also the ratio laid by Apex Court on these deductions. - Appeals allowed by way of remand

Summary

Issues involved:
1. Valuation dispute regarding cigarettes manufactured by the appellant.
2. Valuation dispute regarding smoking mixture manufactured by the appellant.
3. Finalization of pending provisional assessments.
4. Allegations of excess recovery by wholesale dealers.
5. Show cause notices issued by Collector of Central Excise.
6. Orders passed by CCE (Adjn.), Delhi.
7. Appeal before CESTAT, Kolkata.
8. Finalization of provisional assessments by ACCE, Bhagalpur.
9. Deductions and additions disputed in the proceedings.
10. Multiplicity of adjudicating authorities.
11. Remand of appeals to the adjudicating authority.

Analysis:
1. The appellant filed appeals against valuation disputes regarding cigarettes and smoking mixture manufactured during a specific period. The disputes arose due to pending post manufacturing expenses (PME) and were resolved by the Apex Court. Show cause notices were issued regarding alleged excess recovery by wholesale dealers, leading to a demand of ?1.12 Crores. The matter was further complicated by allegations of evasion of duty through various margins and expenses.

2. Show cause notices were issued to multiple factories of the appellant, leading to finalization of provisional assessments by different authorities. Orders were passed by CCE (Adjn.), Delhi, and subsequent appeals were filed before CESTAT, Kolkata. The appellant contested the validity of the show cause notices and the necessity for finalization of assessments before issuing notices under Section 11A of the Central Excise Act, 1944.

3. The ACCE, Bhagalpur, issued a show cause notice for a specific period, and after a series of orders and appeals, the matter was remanded for further adjudication. The appellant disputed various deductions and additions, including PME charges, bank charges, interest on investments, and advertisement expenses. The issue of multiplicity of adjudicating authorities was raised, leading to a remand of the appeals to the adjudicating authority for a comprehensive review based on previous orders and Supreme Court rulings.

4. The appeals were allowed by way of remand to the adjudicating authority, emphasizing the need for a personal hearing for the appellant. The bench clarified that no observations on the merits of the case were made, and the adjudicating authority was tasked with deciding the issues based on previous orders and Supreme Court rulings. The remand was aimed at ensuring a fair and thorough assessment of the disputed deductions and additions.