2024 (1) TMI 136 - AT - Central Excise

Levy of Central Excise Duty - crane cleared within the factory - amounts to clearance or not - time limitation - suppression of facts or not - HELD THAT - In general the goods manufactured and used within the factory is prima facie eligible for exemption Notification No. 67/95-CE. However, the said notification carries certain conditions and said conditions. However, in case of non-compliance of the condition the exemption shall not apply. On the scrutiny of the impugned order we find that though the adjudicating authority has given general remark about the captive consumption but the Notification No. 67/95-CE was neither explicitly mentioned nor it s conditions were verified. Time Limitation - suppression of facts or not - HELD THAT - As regards the valuation of the goods it is found that adjudicating authority has not followed the cost accounting standard as per the CAS-4 to arrive at the value of the goods for discharging Excise Duty in terms of Rule 8 for captive consumption. Therefore this aspect needs to be reconsidered. The entire matter on all the issues need to be reconsidered by the adjudicating authority afresh. The matter remanded to Adjudicating Authority for passing a fresh order - appeal allowed by way of remand.

Issues involved:
The issues involved in this case are:
1. Whether the appellant evaded Central Excise Duty by manufacturing and clearing crane within the factory for captive consumption.
2. Whether the demand of duty on the manufacture and use of crane within the factory is sustainable.
3. Whether the entire demand is time-barred.
4. Whether the charge of clandestine removal is established against the appellant.

Issue 1:
The Adjudicating Authority confirmed the appropriation of Rs. 25,00,000 paid by the appellant during the investigation, alleging evasion of Excise Duty on cranes manufactured and cleared within the factory for captive consumption.

Issue 2:
The appellant argued that the cranes manufactured and used captively within the factory for producing excisable goods are exempted under Notification No. 67/95-CE dated 16.03.1995, and therefore, no duty should be demanded.

Issue 3:
The appellant contended that the entire demand is time-barred as there was no intention to evade payment of duty, supported by the belief that the goods used were not excisable. Various judgments were cited to support this argument.

Issue 4:
The appellant claimed that the charge of clandestine removal is not established as the goods manufactured were not removed from the factory but were always available on-site. Several judgments were cited to support this claim.

In the judgment, the Tribunal found that while the goods manufactured and used within the factory may prima facie be eligible for exemption under Notification No. 67/95-CE, certain conditions must be met for the exemption to apply. The Tribunal observed that the adjudicating authority did not explicitly mention the notification or verify its conditions, necessitating a reconsideration of this aspect.

Moreover, the Tribunal noted that the appellant's argument regarding the demand being time-barred due to non-suppression of facts and the goods remaining within the factory needs detailed reconsideration. Additionally, the valuation of goods for discharging Excise Duty was found to not comply with cost accounting standards, requiring a reassessment.

As a result, the Tribunal set aside the impugned order and remanded the matter to the Adjudicating Authority for a fresh decision, considering the observations made. All issues were kept open for further examination, and the appeals were allowed by way of remand to the Adjudicating Authority.

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