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2024 (2) TMI 1157 - AT - Central ExciseValuation - taking local Maximum Retail Price (MRP) for calculating the aggregate of Customs duties (Basic, CVD, SAD, Cess) to arrive at the Excise duty payable by 100% EOU under the Proviso to Section 3(1) of the Central Excise Act 1944 - correctness of demanding Education Cess and Secondary and Higher Education Cess once again on the aggregate of customs duties which already includes such Cess on the basic customs duty and CVD - SCN purportedly issued under Section 11A (5) of the Central Excise Act 1944 is without jurisdiction since the said Section 11A (5) stood omitted with effect from 14-5-2015 or not - whether Notice is barred by time and the larger period of limitation apply since the goods were cleared after verification of duty payment and issue of No dues certificate by the central excise officer? HELD THAT - It would be evident from the calculation that the Principal Commissioner has wrongly calculated the Basic customs duty on the MRP of the goods, which is contrary to the provisions of Proviso to Section 3 (1) of the Central Excise Tariff Act. As per Proviso to said Section 3 (1), Excise duty on goods manufactured by a 100% EOU and brought to any place in India shall be an amount equal to aggregate of customs duties leviable on like goods when imported into India and the value of such goods shall be as per the Customs Act 1962 and the Customs Tariff Act 1975. The said Acts do not provide for calculating the basic customs duty on the local Maximum Retail price (MRP) but require adoption of the transaction value as per Section 14 of the Customs Act 1962. Instead of taking such value which is mentioned in the Column before the Column of MRP on page 55 of the Appeal, the Principal Commissioner has taken the MRP, which is plainly erroneous. Accordingly, the assessable value taken for calculating the Basic Duty is ex-facie erroneous. As regards the CVD, the Principal Commissioner has wrongly calculated the same on MRP instead of MRP less abatement under Notification No. 49/2008-CE (NT) dated 24-12-2008. Accordingly, the value taken for calculation of CVD is also ex-facie erroneous. Further, the Principal Commissioner has wrongly taken Education Cess and Secondary and Higher Secondary Education Cess once again on the aggregate of customs duties, although the same were already considered while calculating the aggregate of customs duties. Extended period of limitation - HELD THAT - Even otherwise, the Show Cause Notice dated 27-05-2015, which is purportedly issued under Section 11A (5) of the Central Excise Act 1944 was not maintainable in law since the said Section 11A (5) stood omitted with effect from 14-05-2015. The show cause notice having been issued under a non-existing provision is not maintainable in law. Further the said Section 11A (5) read with Section 11A (4) is applicable in cases of fraud, collusion, willful mis-statement, suppression of facts or contravention with intent to evade, none of which is present in this case. As evident from letter dated 22-5-2012 of the Superintendent, prior to de-bonding, the factory was visited by the Central Excise officers and the stock and calculation of duty were duly verified by the Central Excise officers. It is evident from the letter that the department was fully aware of availing of notification No.23/2003-CE. Therefore, the larger period of limitation is inapplicable in the present case. The impugned order is not tenable and is liable to be set aside - appeal allowed.
Issues involved:
The issues involved in the judgment are: - Calculation of duty payable by a 100% EOU on finished goods at the time of De-bonding. - Demand of Education Cess and Secondary and Higher Education Cess on the aggregate of customs duties. - Validity of Show Cause Notice issued under Section 11A (5) of the Central Excise Act 1944. - Applicability of the larger period of limitation in the case. Calculation of Duty Payable: The Tribunal found that the Principal Commissioner had erroneously calculated the Basic customs duty on the Maximum Retail Price (MRP) of goods, contrary to the Proviso to Section 3(1) of the Central Excise Act. The correct method required the adoption of the transaction value as per the Customs Act 1962. Similarly, the calculation of Countervailing Duty (CVD) was also found to be incorrect as it was done on MRP instead of MRP less abatement. The Principal Commissioner also erred in reapplying Education Cess and Secondary and Higher Secondary Education Cess on the aggregate of customs duties, which had already been considered. Correcting these errors, the duty payable on the finished goods was determined to be Rs.29,69,442, significantly lower than the amount paid by the Appellant. Demand of Education Cess: The Tribunal noted that the Principal Commissioner had wrongly imposed Education Cess and Secondary and Higher Education Cess again on the aggregate of customs duties, despite these being already included in the calculations. This action was deemed contrary to established legal precedents set by the Tribunal in previous cases. The reapplication of these Cesses was considered erroneous and not in accordance with the law. Validity of Show Cause Notice: The Tribunal determined that the Show Cause Notice issued under Section 11A (5) of the Central Excise Act 1944 was not maintainable in law as this section had been omitted with effect from 14-05-2015. The absence of this provision rendered the Notice invalid. Furthermore, Section 11A (5) is applicable in cases of fraud, collusion, willful misstatement, or suppression of facts, none of which were present in this case. The Tribunal also highlighted that prior to De-bonding, the Central Excise officers had verified the stock and calculation of duty, indicating that the department was fully aware of the situation. Therefore, the larger period of limitation did not apply in this instance. Applicability of Larger Period of Limitation: The Tribunal referenced legal decisions to support the argument that the larger period of limitation was not applicable in this case. The judgments cited emphasized that where De-bonding was done after verification by Central Excise and issuance of a No dues certificate, the larger period of limitation could not be enforced. Additionally, it was noted that even demands in terms of the Bond had to be within the limitation period. Based on these considerations, the Tribunal concluded that the impugned order was not tenable and set it aside, allowing the appeals.
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