2016 (8) TMI 350 - AT - Central Excise

Rectification of mistake - 3 issues raised but only two were decided - Issue not decided was demand of SAD on value of goods transferred from appellant s EOU Unit to different C&F agents in different states - sales tax paid at the time of sale - Appellant submitted that no SAD was payable - Held that - it is evident from the record that though the appellant had raised the issue that no SAD is payable on goods stock transferred to other states, however, no finding with respect to this was recorded in the Final order dated 20.07.2015. Further, there is no dispute on merit regarding admissibility of this claim of the Appellant as the Department has already accepted the correctness of the same in its comments/ verification report. therefore, the applications for rectification of mistake filed by the appellant have to be allowed. - ROM allowed

Summary

Issues:
Rectification of mistake in the final order regarding quantification of duty demand.

Analysis:
The appellant filed two Miscellaneous Applications seeking rectification of a mistake in the Final Order passed in the appeals. The Tribunal decided on two issues out of the three raised by the appellant regarding the quantification of duty demand. The issues decided were related to the demand of SAD on the value of goods transferred from the appellant's EOU to other EOUs and the calculation of demand considering the sales value as cum-duty price. However, the third issue regarding the demand of SAD on goods transferred to C & F agents in different states was not addressed in the Final Order.

The appellant had raised the issue that no SAD was payable on goods stock transferred to C & F agents in different states, on which sales tax was duly paid at the time of sale. The department accepted the claim of the appellant in principle, as evidenced by the comments and verification report dated 31.01.2013. The appellant argued that as per Notification No. 23/2003-C.E., SAD is not payable on goods not exempted from payment of sales tax, and since the goods were only transferred and not sold, they were not exempted from sales tax.

The Tribunal acknowledged that the issue regarding SAD on goods transferred to C & F agents in different states was duly raised by the appellant and contested. The department's submission on this issue was on record. Under Section 35C(2) of the Central Excise Act, the Tribunal may amend any order to rectify any apparent mistake from the record. It was evident that the issue was raised by the appellant, contested, and the correctness of the claim was accepted by the department.

The Tribunal noted that although the appellant had raised the issue that no SAD was payable on goods transferred to other states, this aspect was not addressed in the Final Order. There was no dispute on the merit regarding the admissibility of the claim, as the department had already accepted the correctness of the claim in the verification report. Therefore, the Tribunal deemed it appropriate to allow the applications for rectification of the mistake filed by the appellant.

In conclusion, the Tribunal allowed the Miscellaneous Applications and substituted paragraph 4 of the Final Order. The matter was remanded to the adjudicating authority for re-quantification of the correct demand of duty payable by the appellant, considering the benefits of no SAD on goods transferred to other EOUs and C & F agents in different states, and taking the value of goods as cum duty price. The penalty on the appellant was set aside due to the settlement of the issue by the Larger Bench of the Tribunal.