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2019 (9) TMI 1142 - AT - Central ExciseUndervaluation - extended period of limitation - Section 11A(4) of the Central Excise Act, 1944 - period of dispute is from 27.05.1996 to 04.03.2001 - HELD THAT - The Hon ble Apex Court, in one of its very recent judgements in the case of M/S D.J. MALPANI VERSUS COMMISSIONER OF CENTRAL EXCISE, NASHIK 2019 (4) TMI 587 - SUPREME COURT has considered the amended provisions of transaction value in the context of determining transaction value including an additional amount paid voluntarily by a customer towards donation, which is called as Dharmada and the includibility of the same in the transaction value. The duty can only be on the transaction value. In the case on hand, the transaction value cannot be anything other than the valuation arrived at by a qualified Cost Accountant in his CAS-4 certificate. The other peculiar fact of the case is that the audit party has acknowledged the furnishing of such CAS-4 certificate and the Assistant Commissioner of the Revenue has acknowledged that the appellant had in fact furnished all the required documents and hence, no deficiency notice was issued. The valuation as per CAS-4 certificate which has gone on records of the Revenue is required to be accepted - the Adjudicating Authority is directed to go by the valuation as per the CAS-4 certificate alone. Extended period of limitation - HELD THAT - The Revenue authorities were aware of the method of valuation adopted by the appellant which was based on the CAS-4 certificate which in fact underwent proper scrutiny by the audit party of the Revenue as early as in 2016-17 and hence, there cannot be any scope to allege suppression, fraud, etc.; therefore, invoking the extended period of limitation in the Show Cause Notice dated 26.04.2018 is not just and proper. Appeal allowed - decided in favor of assessee.
Issues:
1. Allegation of undervaluation of finished goods. 2. Validity of Show Cause Notice issued after a significant delay. 3. Interpretation of statutory provisions related to valuation of excisable goods. 4. Application of transaction value in determining duty of excise. 5. Acceptance of CAS-4 certificate as the basis for valuation. Analysis: 1. The appellant contended that the Order-in-Original alleging undervaluation was passed without considering crucial aspects, such as the furnishing of CAS-4 certificate before the audit party itself. The Order-in-Appeal upheld the non-furnishing of the CAS-4 certificate, leading to the present appeal challenging this decision. The appellant argued that the Revenue's awareness of the valuation method during the audit precluded the delayed Show Cause Notice, invoking the period of limitation. 2. The Departmental Representative supported the lower authorities' findings, citing the decision of the Hon'ble Supreme Court in a relevant case. The AR justified the extended period of limitation based on the undervaluation issue coming to light during the audit. The appellant countered by asserting that all details, including the CAS-4 certificate, were provided to the audit team, eliminating the grounds for suppression or fraud, thus rendering the delayed Show Cause Notice time-barred. 3. The judgment extensively analyzed the statutory provisions concerning the valuation of excisable goods under the Central Excise Act, comparing the original Section 4 with the amended version effective from 2000. The Court emphasized the importance of transaction value in determining excise duty, as stipulated in Section 4(3)(d), which includes all amounts payable for the goods. The judgment referenced recent case law to underscore the significance of actual price paid for goods in excise duty calculations. 4. The Court highlighted the necessity of adhering to the transaction value determined by a qualified Cost Accountant in the CAS-4 certificate, as acknowledged by the audit team and Revenue officials. Emphasizing that the Adjudicating Authority should have considered the CAS-4 certificate before passing the Order-in-Original, the judgment concluded that the valuation based on the CAS-4 certificate should prevail. The decision critiqued the blind application of precedent and stressed the importance of transaction value as per the CAS-4 certificate. 5. Ultimately, the judgment allowed the appeal, directing the Adjudicating Authority to rely solely on the valuation as per the CAS-4 certificate. It dismissed the invocation of the extended period of limitation due to the Revenue's prior awareness of the valuation method. The appellant's contentions regarding the proper scrutiny of the CAS-4 certificate by the audit party were deemed valid, leading to the allowance of the appeal with consequential benefits as per the law.
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