2023 (5) TMI 756 - AT - Central Excise

Recovery of Central Excise Duty - ascertainment of the correct assessable value of automotive tyres cleared for the replacement segment market - case of Revenue is that appellant had contractually undertaken to discharge duty liability on automotive tubes and failure to do so upon alteration of assessable value had been brought out in the impugned order - HELD THAT - This matter is before us consequent to fresh adjudication directed by the Tribunal; in the remand order, the manner in which ascertainment of claim of the appellant was to be dealt with had been spelt out. That order had not been complied with by the adjudicating authority. A change of guard in the office of the adjudicating Commissioner did not discharge the onus devolving on that authority to carry out the adjudication in conformity with the remand order. That the law must prevail could not have been unknown to departmental officers, that the statute does not contemplate collection of duty beyond the authority of law does not have to be stated and that convenience of presumption of non-payment of taxes is, surely, anathema to responsible tax administration is an article of faith not alienable by the State. There are no option other than to set aside the impugned orders. Learned Senior Counsel submitted that it would be possible to establish the veracity of their claim of actual assessable value, in the manner undertaken earlier, within six months. Accordingly, the adjudicating authority is directed to issue appropriate directions to the jurisdictional field formations to report on the reconciliation within that time frame and, thereafter, adjudicate the show cause notice. Appeal allowed by way of remand.

Issues:
1. Discrepancy in the determination of duty liability by the Commissioner of Central Excise.
2. Dispute regarding the discharge of differential duty liability on 'automotive tubes'.
3. Failure to provide documentary evidence for the discharge of differential duty on products intended for the 'replacement segment' market.
4. Non-compliance with the Tribunal's directions for verification and submission of invoices.
5. Denial of abatement of liability tied to discounts offered to dealers in the 'replacement segment' market.
6. Allegation of failure to discharge duty liability on 'automotive tubes' upon alteration of assessable value.
7. Non-compliance with the remand order for fresh adjudication.

Analysis:
1. The Appellate Tribunal CESTAT Mumbai addressed the appeal by M/s Classic Auto Tubes Ltd against the orders of the Commissioner of Central Excise, Pune-IV for the recovery of duties of central excise. The appellant raised concerns about the Commissioner discarding the verification scheme directed by the Tribunal, leading to a dispute in the determination of duty liability.

2. The appellant, a manufacturer of 'automotive tubes', had a conversion agreement with M/s Apollo Tyres Ltd for job working. Duty liability on the 'automotive tubes' was discharged based on values declared by M/s Apollo Tyres Ltd. Discrepancies arose in duty liability due to post-clearance developments, resulting in differential duty payments. The appellant contended that the principal was responsible for discharging the differential levy as per contractual obligations.

3. Regarding products for the 'replacement segment' market, the appellant claimed to have discharged differential duty along with interest, supported by documentation. However, the Commissioner proposed recovery for the period from December 2007 to November 2012 due to alleged inability to provide a documentary trail for the differential duty discharge.

4. The Tribunal directed the appellant to provide evidence for duty payments by M/s Apollo Tyres Ltd and submit invoices for verification. However, the appellant claimed non-compliance with the verification process due to the successor Commissioner's refusal to endorse it, leading to the impugned orders for recovery of duties.

5. The appellant argued for abatement of liability related to discounts offered to dealers in the 'replacement segment' market. The Authorized Representative highlighted the appellant's contractual duty to discharge liability on 'automotive tubes', emphasizing past failures in providing reconciliation basis.

6. The Tribunal set aside the impugned orders due to non-compliance with the remand order and directed the adjudicating authority to report on the reconciliation within six months. The order emphasized the importance of adhering to legal procedures and providing ample opportunity for re-determination before concluding the appeal.

← Previous Next →