2017 (12) TMI 273 - AT - Central Excise

Refund of excess paid duty - value of scrap on which appellant have discharged excise duty - comparable price - Held that - if the price of comparable goods is available, same can be applied to determine value - in the present case appellant have relied upon purchase invoice of scrap whereunder they purchased the scrap. However, at the same time department could not produce any material on record to reject such comparable price or to prove some different price of other comparable goods therefore in such situation the comparable price adopted by the appellant could not be rejected in absence of any other material evidence. Aappellant correctly applied the price of the comparable goods i. e. scrap. Accordingly, whatever excess excise duty was paid the same is refundable in accordance with law - appeal allowed - decided in favor of appellant.

Summary

Issues:
Valuation of scrap for excise duty payment.

Analysis:
The case involved the appellant who had goods manufactured by a job worker using steel supplied by them. The appellant paid excise duty on the scrap arising from the job work at the value of the prime material of steel instead of the prevailing price of the scrap. The appellant filed a refund claim for the excess duty paid, which was initially rejected by the Original adjudicating authority and upheld by the Commissioner(Appeals). The Tribunal, in a previous order, remanded the case to the adjudicating authority for reconsideration. The refund claim was again rejected, leading the appellant to appeal before the Tribunal.

The appellant argued that the only issue to be decided was the correct valuation of the scrap, as per the Tribunal's remand order. They contended that the price of comparable goods they adopted was the correct value of the scrap since the actual sale value was unavailable. The appellant relied on Rule 7 of the Central Excise Valuation Rules, 1975, stating that the value should be determined based on the best judgment principle, which, in this case, was the price of comparable goods.

On the other hand, the Revenue representative reiterated the findings of the impugned order, contesting the appellant's valuation of the scrap.

The Tribunal noted that this was the second round of litigation on the issue. In the previous order, the Tribunal had set aside the lower authorities' orders and remanded the case for denovo consideration, emphasizing the need for the correct valuation of the scrap based on evidence provided by the appellants. The Tribunal found that Rule 7 was applicable in this case, allowing the adoption of the price of comparable goods. Since the department failed to produce any material to reject the appellant's comparable price, the Tribunal concluded that the appellant correctly applied the price of the comparable goods for valuation. Consequently, the excess excise duty paid was deemed refundable, and the impugned order was set aside, allowing the appeal in favor of the appellant.

In conclusion, the Tribunal ruled in favor of the appellant, allowing the refund subject to verification, based on the correct valuation of the scrap for excise duty payment.