2023 (6) TMI 1240 - AT - Central Excise

Method of Valuation - Lead Acid Battery falling under sub heading 85071000 of the Central Excise Tariff Act, 1985 - to be valued under Section 4 of the Central Excise Act, 1944 or Section 4A of the Central Excise Act, 1944? - suppression of facts - extended period of limitation - HELD THAT - The entire defence of the appellant is on the basis of the affidavit which was filed belatedly that the Lead Acid Batteries cleared by the appellant which is used for automobiles were correctly valued under Section 4A on the ground that they had supplied the uncharged batteries and the charging was carried out at the dealers place which activity amounts to manufacture. Therefore, any goods cleared which is subjected to further manufacture should be valued under Section 4 and not 4 A - It is found that other than affidavit there is no documentary evidence produced by the appellant to establish the claim of the appellant that the battery was cleared uncharged and at the dealers place the batteries were charged before selling to the customers. From the finding of the Adjudicating Authority it is clear that except affidavit there is no other evidence to show that the battery cleared by the appellant was uncharged Lead Battery. Therefore, there is no difference in the nature of the clearance made to individual customer wherein the valuation was admittedly done by the appellant under Section 4 A and the nature of clearance made to the dealers. Therefore, the clearance made to dealers is also to be valued under Section 4 A of Central Excise Act, 1944. Extended period of limitation - Suppression of facts - HELD THAT - The appellant have not disclosed that whether the battery was cleared charged or uncharged. Moreover, the affidavit was also filed belatedly, this fact was not declared during statement of the director recorded at the time of investigation - the appellant have suppressed the vital fact from the department about the nature of clearance. In this fact, the extended period was rightly invoked in the present appeal. There are no infirmity in the impugned order - appeal dismissed.

Summary

Issues involved:
The issue involved in this case is whether the Lead Acid Batteries cleared by the appellant should be valued under Section 4 or Section 4A of the Central Excise Act, 1944.

Comprehensive details of the judgment for each issue:

1. Valuation under Section 4 or Section 4A:
The appellant, engaged in the manufacture of Lead Acid Batteries, was found to be clearing goods under Section 4 instead of Section 4A, which led to a demand for differential duty. The appellant argued that the batteries required further treatment before being marketable, constituting manufacturing under Section 2(f)(iii). However, the lack of evidence supporting this claim led the tribunal to uphold the valuation under Section 4A. The Adjudicating Authority's detailed analysis highlighted discrepancies in the appellant's contentions, emphasizing that the batteries were cleared in a charged and ready-to-use condition, not as uncharged batteries. The tribunal found no difference in valuation between sales to individual customers and dealers, supporting the Section 4A valuation.

2. Limitation on demand:
The appellant contended that the demand was beyond the one-year limitation period due to regular duty payments and filings. However, the tribunal noted the appellant's failure to disclose crucial information about the nature of clearance, leading to the rightful invocation of the extended period. The belated filing of an affidavit and the suppression of facts regarding the charged or uncharged status of the batteries further justified the extended period. The tribunal dismissed the reliance on judgments like Exide Industries Ltd. as the appellant failed to prove the clearance of batteries in an uncharged form.

3. Conclusion:
After considering both parties' submissions and the lack of substantial evidence supporting the appellant's claims, the tribunal upheld the valuation under Section 4A and dismissed the appeals. The tribunal found no infirmity in the impugned order and upheld the decision, emphasizing the lack of evidence supporting the appellant's position.

*(Pronounced in the open court on 28.06.2023)*