2019 (1) TMI 1102 - AT - Central Excise

Scope of remand - remand order limited to determination of the utilisation of advance received from the customer, which had been exceeded by the adjudicating authority - Held that - As the adjudicating authority was unable to come to a conclusion based on the limited documentation furnished by the appellant and has rendered a finding that the remand order of the Tribunal could not be interpreted in such a narrow manner as to deny Revenue of its authority, and its obligation, to ascertain the elements that should comprise the assessable value, it is the appropriateness of that finding which concerns us. The adjudicating authority is within his powers to accept or reject the contention of the certificate of the Chartered Accountant on the basis of available, or requisitioned, material. That would have been the conclusion of the adjudicating authority on applying his own mind. Borrowing from an erased order cannot be construed as proper application of mind. Matter to be considered afresh by the adjudicating authority - appeal allowed by way of remand.

Summary

Issues involved:
- Appeal against order confirming differential duty of central excise
- Exceeded terms of remand by Tribunal
- Utilization of advance received from customer
- Inclusion of notional interest in assessable value
- Sufficiency of certificate from Chartered Accountant
- Interpretation of remand order by adjudicating authority
- Proper application of mind by adjudicating authority

Analysis:
1. Appeal against order confirming differential duty of central excise:
The appeal was filed by M/s XAL Engineering (I) Pvt Ltd against the order confirming a differential duty of central excise along with interest and penalty under section 11AC of the Central Excise Act, 1944. The appellant contended that the terms of remand by the Tribunal were exceeded by the adjudicating authority.

2. Utilization of advance received from customer:
The dispute revolved around the advance secured from M/s Cipla Ltd for the supply of machinery designed for its exclusive use. The appellant claimed that they had not utilized the advance for any purpose and had used it towards the payment due upon the supply of machinery. The appellant argued that the notional interest claimed by the Revenue should not be included in the assessable value based on previous Tribunal decisions.

3. Inclusion of notional interest in assessable value:
The Revenue contended that the notional interest on the advance should be included in the assessable value. The Tribunal referred to a decision in GAIL India Ltd v. Commissioner of Central Excise, Gwalior, which held that certificates from Chartered Accountants could corroborate but not replace the main evidence required from the appellant.

4. Sufficiency of certificate from Chartered Accountant:
The appellant had submitted a certificate from a Chartered Accountant to establish that the advance had not earned any interest. However, the adjudicating authority found the certificate unsatisfactory and requested additional documents supporting the certificate, which the appellant failed to provide.

5. Interpretation of remand order by adjudicating authority:
The Tribunal noted that the adjudicating authority had extended the scope of re-adjudication beyond the terms of the remand order, which required only an evaluation of the evidence provided by the appellant. The adjudicating authority's reliance on erased orders was deemed improper.

6. Proper application of mind by adjudicating authority:
The Tribunal found that the adjudicating authority's conclusion based on erased orders was not legally sustainable. The authority was directed to consider the matter afresh, emphasizing the importance of providing additional material sought by the adjudicating authority.

In conclusion, the Tribunal set aside the impugned order and remanded the matter back to the adjudicating authority for fresh consideration, highlighting the need for proper evaluation of evidence and the importance of providing all requested documentation.