2023 (12) TMI 118 - AT - Central Excise

Valuation - cost 15% for arriving at the assessable value - inclusion of certain elements of cost in the computation of the total cost or not - revenue neutrality - Show Cause Notice for the period April 2000 to March 2001 was issued on 29.07.2005 - time limitation - HELD THAT - The issue is squarely covered by the decisions of this Tribunal in M/S. JAI BALAJI INDUSTRIES LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, BOLPUR 2023 (6) TMI 1102 - CESTAT KOLKATA and M/S. HINDALCO INDUSTRIES LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, BHUBANESWAR-II 2023 (5) TMI 720 - CESTAT KOLKATA , wherein it has been held that when the duty paid by the parent unit is eligible as Cenvat Credit to the receiving unit, the entire proceeding becomes revenue neutral. There are also force in the Appellant s submissions that the Department has issued the Show Cause Notice in a belated way though all the details were available with the Department in view of their Monthly Returns being filed. Since the issue is that of revenue neutrality, in such a case, it has been held that the question of suppression would not arise. Tforce in the Appellant s submissions that the Department has issued the Show Cause Notice in a belated way though all the details were available with the Department in view of their Monthly Returns being filed. Since the issue is that of revenue neutrality, in such a case, it has been held that the question of suppression would not arise. The appeals allowed both on merits as well as on limitation.

Summary

Issues involved: Assessable value calculation for clearing gear boxes, Revenue neutrality, Suppression of facts, Show Cause Notice issuance delay.

Assessable value calculation for clearing gear boxes: The Appellant, a subsidiary of M/s. Tata Motors Limited, followed cost + 15% to determine the assessable value for clearing gear boxes to M/s. Tata Motors Ltd. The Department alleged that certain cost elements were not included, leading to a demand. The Ld.Counsel argued for revenue neutrality, stating that the excise duty paid was availed as Cenvat Credit by TML, citing relevant case law. The Appeal was sought to be allowed on merits.

Suppression of facts and Show Cause Notice issuance delay: The Ld.Counsel contended that there was no suppression by the Appellant as all data was available with the department, and monthly returns were regularly filed. The Show Cause Notice for the period in question was issued belatedly, and hence, the confirmed demand should be set aside on the grounds of limitation as well. The issue of revenue neutrality was emphasized to negate the question of suppression.

Decision: The Tribunal found that the issue was covered by previous decisions holding that when duty paid by the parent unit is eligible as Cenvat Credit to the receiving unit, the proceedings become revenue neutral. It was noted that the Show Cause Notice was issued late despite available data, and in cases of revenue neutrality, the question of suppression does not apply. Consequently, the appeals were allowed on both merits and limitation, with the Appellant deemed eligible for any consequential relief as per the law.