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2023 (3) TMI 496 - AT - Central ExciseValuation - non-inclusion of packing charges in the assessable value - place of removal - duty demand on Post-Manufacturing Expenses - discrepancies in the trial balance as well as the Chartered Accountant certificate produced by the respondents - refund of duty paid on After sales services, Pre-delivery inspection charges and Automobile cess - applicability of doctrine of unjust enrichment - demand of interest. Whether packing charges has to be included in the assessable value or not? - HELD THAT - The said issue stands settled by the judgment of Apex Court in the respondent's own case as reported in ROYAL ENFIELD (UNIT OF EICHER LTD.) VERSUS CCE 2011 (8) TMI 40 - SUPREME COURT where it was held that the packing which is given by the appellant-company to their motorcycles is necessary for putting the excisable article in the condition in which it is generally sold in the wholesale market at the factory gate and, therefore, such cost is liable to be included in the value of the goods and the cost of such packing cannot be excluded - Applying the ratio laid down in the respondent's own case, it is held that packing charges has to be included in the assessable value. However, for the period 01.05.1996 to 31.03.1997 there has been already an order passed in favour of the respondent dropping the proposal to demand duty on packing charges - Thus, when the Order-in-Original has attained finality in earlier round the same cannot be disturbed in the second round of litigation. Duty demand on the amounts of post-manufacturing expenses (PME) - rejection on the ground of discrepancies in the C.A certificate when compared with the trial balance - HELD THAT - The lower adjudicating authority has summarily dismissed the veracity of the C.A certificate. The Ld. A.R has stressed that as the respondent has failed to produce documents the C.A certificate cannot be accepted. It has to be noted that the respondent has been paying the duty provisionally and they have been filing returns reflecting the duty paid by them along with C.A certificate. The argument put forward by the Ld. A.R that the respondent has not produced necessary documents in the nature of trial balance to verify the veracity of the C.A certificate does not find favour - the Commissioner (Appeals) has correctly proceeded to accept the C.A certificate and modify the demand of duty on post-manufacturing expenses to Rs.12,01,418/-. This issue is found against the Revenue. Refund of duty paid on After-Sales Services, Pre-Delivery Inspection charges, Automobile Cess - Revenue argued that the claim of refund is hit by the bar of unjust enrichment and therefore Commissioner (Appeals) ought not to have held that the respondent is eligible for refund of duty paid on these charges on finalization of provisional assessment - HELD THAT - The show cause notice as well as the adjudication has been carried out as finalization of provisional assessment. To deny the refund, the Department cannot now contend that the claim of refund is under Section 11B. The attempt is to deny the refund on the ground of unjust enrichment. Prior to 25.06.1999, the bar of unjust enrichment was not applicable to a refund arising out of finalisation of provisional assessment - In the case of COMMISSIONER OF C. EX., MUMBAI-II VERSUS ALLIED PHOTOGRAPHICS INDIA LTD. 2004 (3) TMI 63 - SUPREME COURT it was held that unjust enrichment is not applicable to refund consequent upon finalization of provisional assessment under Rule 9B of Central Excise Rules, 1944. Thus, the view taken by the Commissioner (Appeals) that the respondent is eligible for refund does not require any interference. Demand of Interest - HELD THAT - From the records, it is seen that Commissioner (Appeals) has erroneously set aside the demand from 30.12.1983 to 31.03.1997 on the basis of OIO 9/97. The period covered by this OIO is actually from 01.05.1996 to 31.03.1996 only. The respondent accepted the impugned order and has not filed any appeal. The department has filed appeal against such order. The Ld. Counsel for respondent has argued that the interest upto the period set aside by the Commissioner (Appeals) may be waived - There is no ground raised in the Cross Objections with regard to the demand of interest. The respondent cannot claim a relief in an appeal filed by the Department. It is made clear that respondent is liable to pay interest on all balance duty demand on packing chares and PME if not paid by them. Appeal disposed off.
Issues Involved:
1. Inclusion of packing charges in the assessable value. 2. Duty demand on Post-Manufacturing Expenses (PME). 3. Refund of duty paid on After-Sales Services (ASS), Pre-Delivery Inspection (PDI) charges, and Automobile Cess. 4. Liability to pay interest on the duty demand. Detailed Analysis: 1. Inclusion of Packing Charges in the Assessable Value: The Tribunal examined whether packing charges should be included in the assessable value. The Department argued that packing charges incurred within the factory must be included in the assessable value, irrespective of the period before or after the amendment of the definition of 'place of removal'. The respondent contended that the packing was secondary and only for transportation purposes, not for sale. The Tribunal referred to the Apex Court's judgment in Royal Enfield Vs CCE Chennai, which held that packing necessary for putting the excisable article in the condition generally sold in the wholesale market at the factory gate must be included in the value. The Tribunal upheld the inclusion of packing charges in the assessable value but excluded the period from 01.05.1996 to 31.03.1997, as the Order-in-Original No.9/97 had attained finality for this period. 2. Duty Demand on Post-Manufacturing Expenses (PME): The original authority rejected the respondent's claim for PME abatements due to discrepancies in the Chartered Accountant (C.A) certificate and trial balance. The Commissioner (Appeals) accepted the C.A certificate, noting that the respondent provided reconciliation statements explaining the differences. The Tribunal found that the Commissioner (Appeals) correctly accepted the C.A certificate and modified the duty demand on PME to Rs.12,01,418/-, dismissing the Department's argument. 3. Refund of Duty Paid on ASS, PDI Charges, and Automobile Cess: The Department contended that the refund claim was hit by the doctrine of unjust enrichment. However, the Tribunal noted that the provisional assessment was finalized, and prior to 25.06.1999, unjust enrichment did not apply to refunds arising from the finalization of provisional assessments. The Tribunal upheld the Commissioner (Appeals)'s decision that the respondent was eligible for a refund. 4. Liability to Pay Interest on the Duty Demand: The respondent argued that interest under Section 11AB could only be demanded in cases of fraud or suppression of facts, which was not alleged in this case. The Tribunal found no grounds to waive the interest as the respondent did not raise this issue in their cross-objections. The Tribunal clarified that the respondent was liable to pay interest on the balance duty demand on packing charges and PME if not already paid. Conclusion: The Tribunal ordered: (i) The demand of duty on packing charges for the period (31.12.1983 to 30.06.2000) is upheld, except for 01.05.1996 to 31.03.1997. (ii) The duty confirmed on PME is sustained at Rs.12,01,418/-. (iii) The respondent is eligible for a refund of duty paid on ASS charges, PDI charges, and Automobile Cess. (iv) The relief claimed by the respondent regarding liability to pay interest on the duty demand is rejected. The appeal by the Department and the cross-objection by the respondent were disposed of accordingly.
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