2018 (2) TMI 1000 - AT - Central Excise

Rectification of mistake - Held that - it is evident that the aspect of issue concerning clause (ii) and (iii) of Sl. No.3 of Notification No.23/2003 was very much in dispute and indeed was raised in the show cause notices and confirmed by the adjudicating authority. This being so, we find merit in the submission of ld. AR that it is incorrect to state that there is no dispute on this matter from the department s side - the observation of the Tribunal in para 20 of the impugned order, namely, that there is no dispute on either side insofar as clause (ii) and (iii) is concerned, is a mistake apparent on the face of the record, which requires rectification and we proceed to do so accordingly. Ld. counsel has made contentions that the issue has been clarified by the DGFT and Director (Cost) in their favour. We however find that these communications may not have been available to the adjudicating authority - as the Tribunal has already remanded the matter to the adjudicating authority, we modify the order by making additional directions to the said authority to also consider the dispute regarding clause (ii) and (iii) of Sl. No.3 of Notification No. 23/2003, taking into account the submissions put forth by both the sides. ROM application dismissed

Summary

Issues:
1. Interpretation of Notification No.23/2003 regarding exemptions for goods cleared to DTA.
2. Valuation for determining transaction value of DTA clearance.
3. Consideration of Special Additional Duty (SAD) for inter-unit stock transfer.
4. Calculation of education cess and higher secondary education cess for central excise duty.
5. Liability for penalty under section 11AC and Rule 25.

Issue 1: Interpretation of Notification No.23/2003 regarding exemptions for goods cleared to DTA

The Department filed ROM applications seeking rectification of a mistake in the Final Order passed by the Tribunal concerning the interpretation of Notification No.23/2003. The dispute revolved around whether the benefit of the notification could be extended to goods cleared to DTA under the provisions of the EXIM Policy 2002-2007. The Tribunal observed that there was no dispute regarding certain clauses of the notification, but the Department argued that this was an incorrect observation. The Department contended that the appellant was not eligible for exemption under the notification due to a permission granted by the Development Commissioner, which was not covered by the notification. The Tribunal acknowledged the dispute and rectified its observation, directing the adjudicating authority to consider the issue further.

Issue 2: Valuation for determining transaction value of DTA clearance

The Tribunal set aside the demand on the adoption of FOB value for DTA sale, Special Additional Duty (SAD), and Higher Secondary Cess in all four appeals. Consequently, the appellants were not held liable for any penalty, and the pre-deposit made by the appellant was to be retained until finalization of adjudication proceedings. The Tribunal found merit in the Department's submission that the aspect of valuation for DTA clearance was in dispute, contrary to the earlier observation in the Final Order. Therefore, the Tribunal rectified the record to reflect the dispute and directed the adjudicating authority to consider this issue along with the submissions from both sides.

Issue 3: Consideration of Special Additional Duty (SAD) for inter-unit stock transfer

The Department raised concerns about the consideration of SAD for inter-unit stock transfer and whether the goods were exempted from VAT by the State Government. The Tribunal's decision to set aside the demand related to SAD and Higher Secondary Cess was a key aspect of the judgment, indicating a favorable outcome for the appellants in this regard.

Issue 4: Calculation of education cess and higher secondary education cess for central excise duty

The Tribunal addressed the calculation of education cess and higher secondary education cess for central excise duty, determining that the appellants were not liable for penalty under section 11AC and Rule 25 in certain instances. This decision provided clarity on the tax liabilities associated with the central excise duty, ensuring a fair outcome for the appellants.

Issue 5: Liability for penalty under section 11AC and Rule 25

The judgment clarified the liability for penalty under section 11AC and Rule 25, indicating that the appellants were not held liable for penalties in certain scenarios. This aspect of the judgment provided relief to the appellants by setting aside penalties and ensuring a fair adjudication process.

This detailed analysis of the judgment highlights the key issues addressed by the Tribunal, the arguments presented by the Department and the appellants, and the ultimate decisions made regarding each issue.