2017 (12) TMI 1246 - AT - Central Excise

Valuation - related party transaction - comparable goods sold to the independent customer - Rule 6(b)(ii) of Central Excise Valuation Rules, 1975 - Held that - the Tribunal has categorically directed that valuation of the goods is required to be done in term of Rule 6(b)(ii) of Central Excise Valuation Rules, 1975 and on the basis of the principles enunciated as per CAS-4. This order attained finality and no challenge was made either by the Revenue or by the Assessee - It is observed that the adjudicating authority has revalued the goods on the basis of cost sheet as per CAS-4 therefore the Adjudicating authority has scrupulously followed the direction given by the Tribunal. In this position neither Revenue nor the assessee should be aggrieved by the impugned order - appeal dismissed - decided against appellant.

Summary

Issues: Valuation of excisable goods for payment of excise duty, demand of short levy of excise duty, imposition of penalty under Section 11AC, appeal against adjudication order, valuation based on comparable goods, time bar for demand, challenge to Tribunal's order, application of old Valuation Rules 1975 vs. new valuation rules 2000.

In this case, the Appellate Tribunal CESTAT MUMBAI addressed the issue of valuation of excisable goods for the payment of excise duty. The assesses were clearing goods to their related unit based on a costing sheet, resulting in a lower valuation. A demand for short levy of excise duty was raised, leading to a confirmation of the demand and imposition of a penalty under Section 11AC in the denovo adjudication. The appellant argued that goods supplied to a related unit should be valued based on comparable goods sold to independent buyers, citing the legal position established in the case of Ispat Industries Ltd. v. Commissioner of C. Ex., Raigad. The appellant contended that since duty payable was available as Cenvat credit to the recipient unit, there was no suppression of facts, making the demand time-barred and penalty inapplicable. The Revenue also filed an appeal against the dropping of the demand.

Regarding the challenge to the Tribunal's order, the Tribunal had previously remanded the matter with a specific direction to value the goods under Rule 6(b)(ii) of the Central Excise Valuation Rules, 1975, and on the basis of CAS-4 principles. This order was not challenged by either party and attained finality. The adjudicating authority revalued the goods based on the cost sheet as per CAS-4, following the Tribunal's direction. As a result, the Tribunal upheld the impugned order, stating that neither the Revenue nor the assessee should be aggrieved by it. Consequently, both appeals were dismissed. The Revenue's argument regarding the application of old Valuation Rules 1975 versus new valuation rules 2000 was also addressed, with the Tribunal affirming the correctness of the adjudication order based on the direction given by the Tribunal in the previous round of appeal.

In conclusion, the Tribunal's decision emphasized the importance of following specific valuation rules and principles, maintaining consistency with previous orders, and upholding the directions given by the Tribunal in remanding matters for adjudication. The judgment provided clarity on the valuation of excisable goods and the applicability of relevant legal precedents in determining excise duty liabilities.