2016 (5) TMI 1124 - AT - Central Excise

Valuation - additions / deductions from the assessable value u/s 4 - Quantification of duty liability - whether appellant has correctly calculated duty liability of ₹ 6,35,26,796/- based on remittances made to Joint Plant Committee (JPC) or the duty liability should be ₹ 11,17,74,702/- as calculated by the Adjudicating authority? - Held that - As per the procedure prescribed all the member Steel Plants, including the present appellant were required to remit JPC levies to the Joint Plant Committee. Under this factual matrix department was not right in asking the appellant to provide certain information on production & clearances made or to calculate JPC levies from the figures available in the periodical RT-12 returns filed with the department. What is required to be added to the assessable value is the JPC levies remitted to the JPC. If there was any short payment of JPC levies then JPC could have asked the appellant to remit the same but department can not calculate a figure to add to the assessable value on their own based on RT-12 returns. Appellant has calculated on amount of ₹ 6,35,26,796/- based on remittances made to JPC based on certain receipts issued by JPC without supported by a chartered / cost accountant certificate. It is also observed from Para- 5 of Stay order passed by this bench that department had ample powers under the statute to Summon & Call for necessary documents and that in the absence of any documentary evidence, higher demand is prima facia not sustainable. At the same time appellant should have produced either a certificate from JPC to the effect as to how much JPC levies was remitted by the appellant during the relevant period or produce a chartered / cost accountant certificate indicating the basis of calculating duty liability of ₹ 6,35,26,796/-. For this purpose alone the matter is remanded back to the adjudicating authority as demand of ₹ 11, 17, 74,702/- calculated by the department is not sustainable. Needles to say that an opportunity of personal hearing should be extended to the appellant to substantiate their claim based on documents / certificate suggested above as to how much JPC levies have been remitted to JPC during the relevant period. Appeal filed by the appellant is allowed by way of remand to the Adjudicating authority for deciding the issue of quantification of demand in the light of observations made above.

Summary

Issues:
Quantification of duty liability based on JPC levies remitted by the appellant.

Analysis:
The appellant filed an appeal against the quantification made by CCE & CUS Jamshedpur regarding JPC levies. The appellant claimed deduction of certain JPC levies, including SDF, EGEAF, and GPC cess, paid directly to JPC as per specific notifications. However, the deduction was denied by the AC Central Excise, leading to a legal battle that reached the Supreme Court. The Apex Court held that JPC levies were not admissible deductions under the Central Excise Act and had to be included in determining assessable values for excise duty. The matter was remanded to CESTAT for correct quantification. The appellant quantified duty liability based on remittances to JPC, challenging the department's arbitrary calculation of JPC levies from periodic returns.

The Revenue argued that the duty demand calculated by the department was correct, emphasizing the need for evidence of JPC levies received by JPC from the appellant. The Adjudicating authority's findings supported the department's position. The Tribunal examined the case records and the issue at hand, whether the duty liability should be based on appellant's remittances to JPC or the department's calculation. Referring to relevant notifications and procedures, the Tribunal concluded that JPC levies remitted to JPC should determine the assessable value, not calculations based on departmental returns. The appellant's calculation was deemed reasonable, but the lack of proper documentation required remanding the case for further substantiation.

The Tribunal allowed the appeal by remanding it to the Adjudicating authority for a decision based on the observations made. It was emphasized that the appellant must provide evidence of JPC levies remitted during the relevant period, either through a certificate from JPC or a chartered/cost accountant certificate. The need for a personal hearing to support the claim was highlighted. Interest on any differential duty paid or payable was to be determined as per the Adjudications authority's order. The operative part of the order was pronounced in open court, granting the appellant the opportunity to clarify and support their duty liability calculation based on JPC levies remitted.