2017 (1) TMI 797 - AT - Central Excise

Benefit of N/N. 5/99-CE dated 28.02.1999 and 6/2000-CE dated 01.03.2000 - denial on the ground that intermediate goods used in the manufacture of exempted finished goods were not eligible for exemption - Held that - it appears that the Ld. Commissioner (Appeals) by order has accepted, certificate issued by the Chartered Accountant and directed to Assessing Officer to compute the duty pursuant to the costing data. In the peculiar facts and circumstances of the case, the same appears reasonable. Hence, we find no reason to interfere with the impugned order passed by the Ld. Commissioner (Appeals), and the same is hereby sustainable along with the reasons mentioned herein - appeal dismissed - decided against Revenue.

Summary

Issues:
Classification of goods for duty payment, Exemption eligibility for intermediate goods, Correct assessable value declaration, Duty computation based on costing data, Penalty imposition, Interest recovery, Tribunal's decision on appeal by Department.

Classification of Goods for Duty Payment:
The case involved the classification of Polypropylene Multifilament Yarn (PPMFY) and Narrow Woven Fabric (NWF) for duty payment. The appellants were manufacturing NWF using PPMFY as an intermediate product. The jurisdictional Deputy Commissioner modified the classification of NWF, making it exempt from duty payment. This led to the disallowance of the exemption on PPMFY, resulting in a demand for duty payment on PPMFY used in NWF manufacturing.

Exemption Eligibility for Intermediate Goods:
The exemption being availed on PPMFY was disallowed because intermediate goods used in the manufacture of exempted finished goods were deemed ineligible for exemption. The Deputy Commissioner confirmed the duty demand on PPMFY used in NWF production, based on the value declared in the appellants' returns, adjusting the duty liability against the amount paid on NWF.

Correct Assessable Value Declaration:
Allegations arose during a Central Excise audit that the appellants had reduced common expenses allocation to justify a lower assessable value of PPMFY, allegedly to evade excise duty payment. It was claimed that the appellants had under-declared the assessable value in their returns, resulting in a shortfall of excise duty payment.

Duty Computation Based on Costing Data:
The Commissioner reexamined the costing data of PPMFY, certified by Chartered Accountants, and accepted it as per Circular No.692/2003-CX. The duty was required to be recomputed based on this costing data. The Commissioner also imposed a penalty and ordered interest recovery.

Tribunal's Decision on Appeal by Department:
The Department appealed the Commissioner's decision, but the Tribunal upheld the Commissioner (Appeals) order. The Tribunal found no reason to interfere with the decision, considering the facts and circumstances of the case. Consequently, the Department's appeal was dismissed, affirming the sustainability of the Commissioner (Appeals) order.

This detailed analysis covers the issues of classification of goods for duty payment, exemption eligibility for intermediate goods, correct assessable value declaration, duty computation based on costing data, penalty imposition, interest recovery, and the Tribunal's decision on the appeal by the Department.