2019 (2) TMI 1019 - AT - Central Excise

Extended period of limitation - no suppression of facts - Valuation - clearance of goods to their own units - applicability of Rule 8 of the Valuation Rules, 2000 - Held that - There is no element of any suppression of facts nor there is any contumacious conduct on the part of the appellant-assessee - Further the issue is wholly Revenue neutral, as whatever additional duty appellant would have paid, as demanded by Revenue, the same was available as Cenvat Credit to the sister units, which cleared output on payment of duty. The extended period of limitation is not available to Revenue and thus the show cause notice is not maintainable - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Determination of transaction value for levy of duty under Rule 8 of Valuation Rules, 2000 when goods are cleared to own units.
2. Validity of invoking the extended period of limitation for issuing the show cause notice.

Analysis:
1. The appeal involved the question of whether the transaction value for the levy of duty should be determined under Rule 8 of the Valuation Rules, 2000 when goods are cleared to the appellant's own units. The appellant, a manufacturer of Power Cable, was alleged to have cleared "Copper Wire" to their units without paying duty on the value determined at 110% under Rule 8. The appellant argued that the duty paid was available as Cenvat Credit by the units receiving the goods and was used for payment of excise duty on dutiable goods cleared by those units. The Revenue contended that the invoices did not separately show the cost of production and the value determined at 110%, leading to the presumption of undervaluation. However, the Tribunal found no suppression of facts or fraudulent conduct by the appellant and held the issue to be revenue neutral. The extended period of limitation was deemed not applicable, and the show cause notice was set aside.

2. The second issue pertained to the validity of invoking the extended period of limitation for issuing the show cause notice. The Revenue had raised a demand for differential duty in a Show Cause Notice dated 4th May, 2012 for the period 2007-08 and 2008-09, invoking the extended period of limitation. The appellant argued that the show cause notice was issued for a mere change in opinion without any allegation of suppression of facts or fraudulent conduct. The Tribunal concurred with the appellant, stating that there was no suppression of facts or contumacious conduct. The Tribunal held that the extended period of limitation was not available to the Revenue, rendering the show cause notice not maintainable. Consequently, the appeal was allowed, and the impugned order was set aside, granting the appellant consequential benefits as per the law.

This comprehensive analysis of the judgment highlights the key issues, arguments presented by the parties, and the Tribunal's findings on each issue, ensuring a detailed understanding of the legal aspects involved in the case.