9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (5) TMI 870 - AT - Central ExciseMethod of Valuation - goods being accessories of two wheelers - components parts OR accessories - appellant after manufacturing of such goods are clearing to the above buyers without affixing any MRP and assessing the same in terms of Section 4 of Central Excise Act - section 4 or 4A of CEA? - N/N. 49/2008- CE (NT) - Clandestine removal - applicability of legal Metrology Act, 2009 - HELD THAT - The fact remains that these goods when bought by the individual customers were at their own option and the Two Wheeler manufacturers were not mandatorily required to fix these goods on the two wheelers at the time of sale of two wheelers to their customers. The Revenue has not brought any evidence on record to show that the Two Wheelers may not run without the impugned goods or it is mandatory to fix these goods at the time of clearance of the two wheelers from the two wheeler manufacturers factories. The impugned goods are attached to the two wheelers for the convenience and safety of the vehicle as well as of the rider. There is clear difference between the parts and accessories and they cannot be equated with each other. Section 4A of the Central Excise Act, 1944 covers only those excisable goods which are required to declare the retail sale price under the provisions of legal Metrology Act, 2009. Even if the goods are presumed to be listed under Notification 49/2008, the same would not be covered under the provisions of Section 4A of the Central Excise Act, if these are not covered by the provisions of the legal Metrology Act, 2009 and the Rules framed therein. As per explanation of above Notification 49/2008-CE (NT), retail sales price means the maximum price at which the excisable goods in packaged form may be sold to the ultimate consumer and includes all taxes, local or otherwise, freight charges, commission payable to dealers and all charges towards advertisement, delivery, packing, forwarding and the like, as the case may be, and sale price is the sole consideration for such sale. Thus it can be seen that the retail sale price is defined with reference to sale to the ultimate consumer only whereas the industry or institutional consumers are not ultimate consumers - There is no dispute about the fact that the Appellants are selling the goods in bulk pack, wherein per box includes 5 / 6/ 10 pieces per box. It is, thus, absolutely clear that the goods when cleared by the Appellant are not intended for retail sale at the end of M/s RC. The impugned goods are not components, parts or assemblies of the Two Wheeler but are accessories of two wheelers and hence not liable for valuation in terms of Section 4A and Notification No. 49/2008 CE (NT). Further that the goods were at the time of clearance from the factory of M/s RC were not intended to be sold to the ultimate consumer in retail but were intended to be cleared in wholesale package to the industrial customer and hence not liable to duty in terms of Section 4A and Notification No. 49/2008 CE (NT) - the demand made against M/s RC in terms of Section 4A and in terms of Notification No. 49/2008 CE (NT) is not sustainable.. Confiscation of goods - no evidence that the goods were diverted elsewhere - HELD THAT - The charges of clandestine removal has to be investigated and proved and cannot be merely alleged on the basis of incomplete challans or records. No buyer of such goods which were inputs or semi finished goods has been found. No statement of any job worker is appearing on record and no evidence except job work challans are appearing on record. In absence of any buyer and receipt of any consideration it cannot be said that any goods were removed by RC. No discrepancy in stocks has been shown to have occurred. The allegation lacks any corroborative evidence and hence the demands are not sustainable. The show cause notice has not adduced single evidence that the goods were diverted elsewhere. The Appellant has removed all the finished goods on invoices and there is no evidence to suggest removal of inputs or semi finished goods without legitimate invoices. There is no mention in the show cause notice or the impugned order to show that if the semi finished goods after job work were not received back in the factory then where else the same were cleared. The goods were being cleared without complying with the provisions of Section 4A, we hold that since the valuation of goods in terms of section 4 i.e. assessment of duty on transactional value under section 4 is correct, therefore the confiscation of goods is not sustainable. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Classification of goods as parts or accessories of two-wheelers. 2. Valuation of goods under Section 4 or Section 4A of the Central Excise Act. 3. Demand of duty on goods cleared for job work and not received back. 4. Demand of cenvat credit on inputs cleared under delivery challans. 5. Confiscation of goods and demand of duty for unaccounted goods. Detailed Analysis: 1. Classification of Goods as Parts or Accessories of Two-Wheelers: The core issue was whether the goods manufactured by M/s RC, such as Front Guard Assy, Leg Guard, Footrest Step, etc., should be classified as parts or accessories of two-wheelers. The appellant argued that the goods are accessories, not parts, as they are not essential for the manufacture or functioning of two-wheelers. The Tribunal agreed, stating that the goods are not mandatory for the operation of two-wheelers and are added for convenience and safety, thus classifying them as accessories. This classification is significant because Notification No. 49/2008-CE (NT) applies to parts, components, and assemblies, but not to accessories. 2. Valuation of Goods under Section 4 or Section 4A of the Central Excise Act: The appellant assessed the goods under Section 4 (transaction value) of the Central Excise Act, while the Revenue contended that they should be assessed under Section 4A (MRP-based valuation). The Tribunal held that since the goods are classified as accessories and not parts, they are not covered under Notification No. 49/2008-CE (NT) for MRP-based valuation. Additionally, the goods were sold to industrial consumers (HMIPL, IYMPL) who further sold them to dealers after affixing MRP, indicating that the initial sale by M/s RC was not intended for retail sale, thus supporting the assessment under Section 4. 3. Demand of Duty on Goods Cleared for Job Work and Not Received Back: The Revenue demanded ?1,08,90,349/- on the grounds that goods sent for job work were not received back. The Tribunal found that the appellant had sent semi-finished goods for job work, which were returned and cleared on payment of duty. There was no evidence of clandestine removal or diversion of goods. The Tribunal emphasized that the burden of proof for clandestine removal lies with the Revenue, which failed to provide corroborative evidence. Thus, the demand was not sustainable. 4. Demand of Cenvat Credit on Inputs Cleared under Delivery Challans: The Revenue demanded ?48,56,578/- as cenvat credit on inputs cleared under delivery challans. The appellant argued that the inputs were sent for job work and returned, with duty paid on the final product. The Tribunal noted that the inputs were not cleared for sale but for job work on a returnable basis, and the final goods were cleared on payment of duty. Therefore, the demand for cenvat credit was not justified. 5. Confiscation of Goods and Demand of Duty for Unaccounted Goods: The Revenue demanded ?75,976/- and ordered confiscation of goods found unaccounted during the factory visit. The appellant contended that the goods were covered under valid invoices and were pending clearance. The Tribunal held that the mere irregular maintenance of records does not justify confiscation, especially when there was no intent to evade duty. Since the goods were intended to be cleared with proper invoices, the confiscation and demand were not sustainable. Conclusion: The Tribunal allowed the appeal filed by M/s RC, rejecting the Revenue's appeal. It held that the goods are accessories, not parts, and should be valued under Section 4. The demands for duty on job work goods and cenvat credit were not substantiated by evidence, and the confiscation of goods was unjustified. The decision underscores the importance of proper classification and valuation in excise matters and the necessity of concrete evidence for claims of clandestine removal.
|
