2017 (11) TMI 605 - AT - Central Excise

Valuation - removal of input to sister unit - whether valuation of removal of input as such to sister unit should attract payment of duty equal to Cenvat credit availed thereon or under Section 4 of Central Excise Act, during the period 1-4-2001 to 31-12-2003 in terms of Rule 57AB(1)(c) of the Central Excise Rules, 1944 and Rule 3(4) of Cenvat Credit Rules, 2001/2002? Held that - issue and facts of the present case is squarely covered by the Hon ble Apex Court in case of Ispat Metallics Industreis ltd 2016 (5) TMI 306 - SUPREME COURT , where it was held that post removal expenses in respect of removal of input as such cannot be added to calculate the excise duty - appeal dismissed - decided against Revenue.

Summary

Issues involved:
Valuation of removal of input to sister unit for duty payment under Rule 57AB(1)(c) of Central Excise Rules, 1944 and Rule 3(4) of Cenvat Credit Rules, 2001/2002.

Comprehensive Analysis:

Issue 1: Valuation for duty payment on removal of input to sister unit

The appellant argued that duty should be discharged by valuing the goods under Section 4 due to the provision of Rule 57AB(1)(c) of Central Excise Rules, 1944. They cited various judgments to support their stance. However, the respondent contended that since the input was transferred to their sister unit and not sold, Section 4(1) would not apply. They relied on the judgment of the Hon'ble Supreme Court in a similar case. The tribunal analyzed the facts and referred to the relevant rules, highlighting the distinction between goods removed on sale and those transferred. They emphasized the circular's guidance on valuation when goods are transferred to a sister unit without any sale involved. The tribunal upheld the impugned order based on the Supreme Court's decision, concluding that the present case involved a transfer to the sister unit, not a sale. Therefore, the duty payment should be based on the value shown in the invoice for Cenvat credit, following the circular's provisions.

Conclusion:
The tribunal dismissed the Revenue's appeal and disposed of the CO, upholding the impugned order based on the ratio of the Supreme Court's decision. The judgment clarified the valuation method for duty payment on the removal of inputs to a sister unit without any sale involved, aligning with the circular's provisions and legal principles.

This detailed analysis provides a thorough understanding of the legal judgment regarding the valuation of input removal to a sister unit for duty payment under the relevant rules and precedents cited during the case.