2017 (5) TMI 1073 - AT - Central Excise

Valuation - goods manufactured by the assessee used by its another unit for captive consumption - Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules 2001 - N/N. 14/2014-CE(NT) dated 22.11.2013 - Held that - In view of the changes in Rule 8 w.e.f. 01.12.2013 differential duty only for the period January 2012 to March 2013 and April 2013 to November 2013 has been demanded. For the period prior to that date however the earlier provisions of Rule 8 will therefore apply which envisages entire quantity of goods manufactured to be used for consumption by the assessee or on its behalf. If this conditionality was not satisfied value necessarily would have to be determined under Rule 4 of the Central Excise Valuation Rules as it existed during the period under dispute - upto 30.11.2013 appellants were required to discharge duty on the impugned clearances only as per erstwhile Rule 4 of the said Central Excise Valuation Rules 2000. Penalty - Held that - there is no bonafide reason for resorting to undervaluation that appellants instead deliberately suppressed and misstated material facts with intent to evade payment of duty liability - penalties justified. Appeal dismissed - decided against appellant.

Summary

Issues:
1. Delay condonation in filing appeals
2. Valuation of clearances for self-consumption and related units under Central Excise Valuation Rules
3. Applicability of Rule 8 vs. Rule 4 of Valuation Rules
4. Imposition of penalty under Section 11 AC and Rule 27

Issue 1: Delay Condonation
The appellants sought condonation of a 7-day delay in filing their appeals, which was granted by the tribunal based on the reasons provided in the applications. Both appeals were taken up for common disposal as they arose from common orders-in-appeal.

Issue 2: Valuation of Clearances
The dispute revolved around the valuation of cement clearances by the appellants for self-consumption and to related units for manufacturing cement bricks and ready mix concrete under Central Excise Valuation Rules. The department contended that Rule 4 should apply, while the appellants argued for Rule 8 valuation based on CAS-4 valuation.

Issue 3: Rule 8 vs. Rule 4 Applicability
The tribunal analyzed the changes in Rule 8 of the Valuation Rules post the substitution via Notification No. 14/2014-CE(NT) dated 22.11.2013. The tribunal clarified that even if only part of the goods were captively consumed, Rule 8 would apply post the amendment. The tribunal upheld the lower appellate authority's decision that differential duty was only applicable up to 30.11.2013 under Rule 4 for the appellants.

Issue 4: Imposition of Penalty
Regarding penalties under Section 11 AC and Rule 27, the tribunal found the appellants' contentions lacking merit. The tribunal noted that the appellants, not being a small-scale unit, could not claim ignorance of law and procedure. The penalties were deemed justified as the appellants were held to have deliberately suppressed and misstated material facts to evade duty liability.

In conclusion, the tribunal dismissed both appeals, upheld the demand of differential duty up to 30.11.2013 under Rule 4, and maintained the imposition of penalties on the appellants, finding their actions deliberate and not justifiable under the circumstances.