2018 (11) TMI 291 - AT - Central Excise

Valuation - molasses used captively for further production of various spirits - final product was not leviable to duty of excise being a State Subject - Held that - The appellant is unable, even at this stage to show that the molasses were being sold on the lower side in the market by other manufacturers - whereas ₹ 150/- per quintal price covers the period relevant for the purposes of the present appeal, the value shown as ₹ 75/- per quintal is for the subsequent period. He has also not been able to show that the said price of ₹ 220/- per quintal adopted by the Revenue is incorrect. Inasmuch as there is no evidence on record to show that the two prices adopted by Commissioner (Appeals) i.e. 150 220 is not the correct value, the adoption of the average of the said two prices by Commissioner (Appeals) is just and proper and no infirmity can be found - appeal dismissed - decided against appellant.

Summary

Issues:
Valuation of molasses for payment of excise duty during the relevant period.

Analysis:
During the relevant period of August 1994 to June 1995, the appellant adopted a value of &8377;40/- per quintal for the molasses. However, the Revenue initiated proceedings against them, arguing that the market value of molasses was higher. The Original Adjudicating Authority then enhanced the value to &8377;225/- per quintal, leading to a demand of &8377;23,24,454/- along with interest. The Commissioner (Appeals) considered the sale price of molasses by another sugar factory and determined the assessable value to be &8377;185/- per quintal. The Tribunal, in a previous order, remanded the matter back to the Commissioner (Appeals) for re-decision based on the average price of molasses sold by the other factory.

In the Denovo decision, the Commissioner (Appeals) asked for evidence regarding the prices of molasses in the market, specifically from the other sugar factory. The appellant failed to provide such evidence, leading to the confirmation of the value at &8377;185/- per quintal. The appellant later tried to argue for a lower price based on a letter from the other factory indicating different prices for different periods. However, the Tribunal found that the prices adopted by the Revenue and the Commissioner (Appeals) were correct, with no evidence to suggest otherwise. As a result, the Tribunal upheld the Commissioner (Appeals) decision and rejected the appeal filed by the appellant.

Therefore, the dispute regarding the valuation of molasses for excise duty payment during the relevant period was resolved in favor of the Revenue, with the Tribunal upholding the assessable value of &8377;185/- per quintal determined by the Commissioner (Appeals) based on the average prices of molasses sold by another sugar factory.