2017 (9) TMI 697 - AT - Central Excise

Refund claim - rejection on the ground that the cost certificate submitted by the appellant-assessee did not correctly arrive at the valuation to decide 115% of cost of production - Held that - valuation based on costing can be made for clearances prior to 2003 when the cases were pending - reliance placed in the case of NATIONAL ALUMINIUM CO. LTD. Versus COMMISSIONER OF C. EX., BHUBANESWAR-I 2005 (3) TMI 186 - CESTAT, NEW DELHI . Whether the Board circular dt. 1.7.2002 is only clarificatory and Valuation Rules, 2000 will prevail over the said circular? - Held that - valuation under Rule 4 / Rule 11 was not a subject matter before the original authority. Neither it was a subject matter before the first appellate authority. The issue before the lower authorities for a decision was whether the appellant-assessee correctly arrived at the 115% based on costing in terms of Board s circular dt.1.7.2002 - As such, it is not legally tenable for the Revenue to take up an issue which was not all proposed, discussed or decided by both the lower authorities. Since no proposal was made against the appellant-assessee to change the method of valuation in the proceedings before the lower authorities, we cannot go into the said issue for a decision - appeal dismissed. Appeal dismissed - decided against Revenue.

Summary

Issues:
Eligibility of appellant-assessee for a refund of excise duty on pharmaceutical products cleared as free samples.

Analysis:
The appellant-assessee, engaged in pharmaceutical product manufacturing, claimed a refund of excise duty amounting to ?10,63,873, stating they overpaid due to valuation of free samples at a higher rate. The Asst. Commissioner partially sanctioned ?5,26,080, citing incorrect valuation. The Commissioner (Appeals) later allowed the full refund, upholding the appellant's costing method based on a Board's circular. The Revenue appealed, delayed initially but revived by the High Court.

The Revenue's appeal raised two points: reliance on a Tribunal decision and the validity of the Board's circular. The appellant argued that the Tribunal's decision was affirmed by the Supreme Court, and the circular should be binding. The appellant contended that the Revenue cannot introduce new valuation rules at the appellate stage.

The Tribunal found the Revenue's first point unsustainable due to the affirmed Tribunal decision. Regarding the second issue, the Tribunal noted that valuation rules were not part of the original or first appellate authority's consideration. As the Revenue did not propose a change in valuation method earlier, the Tribunal deemed it legally untenable to introduce a new issue at the appellate stage. Therefore, the Revenue's appeal lacked merit and was dismissed.

The Tribunal highlighted the multiple proceedings despite the Commissioner (Appeals) order in favor of the appellant. The Tribunal upheld the Commissioner (Appeals) decision, emphasizing that the relief granted was rightfully due to the appellant. Consequently, the Tribunal allowed the appellant's appeals and dismissed the Revenue's appeal.

In conclusion, the Tribunal allowed the appellant's appeals for the refund claim and upheld the Commissioner (Appeals) decision, dismissing the Revenue's appeal. The Tribunal emphasized the importance of implementing the Commissioner (Appeals) order and granting the appellant the due relief.