2018 (6) TMI 1417 - AT - Central Excise

Valuation of Paper Board - case of appellant is that value of paper board for the purpose of quantification should be fixed at ₹ 12 per kg. - Held that - SCN in para 15.1 to 15.5 has elaborately gone into the raison d etre for adopting the value of ₹ 13 per kg. The very same invoices had been produced before the lower appellate authority who, in Para 13 of the impugned order has noted that they were invoices beyond the period of dispute. The plea of the appellant on this score is therefore found to be specious, and is therefore rejected. Cum-duty benefit - case of appellant is that as the appellant company had not collected any duty amount from UPC, the demand of differential duty may also be re-determined by extending cum duty benefit - Held that - This is a case where the entire transactions were done clandestinely, right from the getting raw materials, to the production and the clearances all of which were sought to be kept away from the eye of the department - there cannot be any mitigation of the tax liability by grant of cum duty benefit. Appeal dismissed - decided against appellant.

Summary

Issues:
1. Duty liability redetermination based on the value of paper board.
2. Extension of "cum duty benefit" for differential duty.
3. Abatement of appeal due to the death of the appellant.

Analysis:

Issue 1: Duty liability redetermination based on the value of paper board
The case involved M/s. Maharaja Paper Board (P) Ltd., engaged in manufacturing paper boards for availing SSi exemption under Notification No. 8/2003-CE. The appellant company was found to have manufactured and cleared final products without accounting for inputs and clearance, leading to a show cause notice proposing a demand of ?12,80,462/- with interest. The adjudicating authority confirmed the demand with interest and imposed penalties. The appellant contended that the value of paper board should be fixed at ?12 per kg for redetermining the duty liability. However, the Tribunal found insufficient evidence to establish ?12 per kg as the standard pricing, rejecting the appellant's plea as specious.

Issue 2: Extension of "cum duty benefit" for differential duty
The appellant argued for the extension of "cum duty benefit" since they had not collected any duty amount from Universal Paper Conversion (UPC). However, the Tribunal noted that the transactions were conducted clandestinely, with deliberate non-accounting of raw materials, production, and clearances. Considering the suppression of information from the department, the Tribunal concluded that there could be no mitigation of tax liability through cum duty benefit. Consequently, the appellant's plea for cum duty benefit was rejected.

Issue 3: Abatement of appeal due to the death of the appellant
During the hearing, it was revealed that the second appellant, Shri P.G. Radhakrishna Raja, had passed away. The appellant's counsel submitted the death certificate, and based on Rule 22 of the Customs, Excise and Service Tax Appellate Tribunal (Procedure) Rules, 1982, the appeal of the deceased appellant was abated. As for the appeal of the appellant company in E/394/2011, it was dismissed by the Tribunal.

In conclusion, the Tribunal dismissed the appeal of the appellant company and abated the appeal of the deceased appellant, emphasizing the lack of evidence to support the appellant's contentions regarding duty liability redetermination and cum duty benefit extension.