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2023 (10) TMI 55 - HC - Central ExciseValuation of Inter-unit transfer of goods for captive consumption - entire value (i.e. 115% / 110% of the cost of production) or the actual cost of production (that is 100% of cost) excluding notional loading (that is 115% / 110%) of the goods manufactured by 1 unit, would be the cost of raw material of the another unit (who used the goods in the manufacture of another article) for the purpose of determining the value under Rule 8 of the Valuation Rules and Cost Accounting Standard-4 issued by ICWAI - Confiscation of goods - imposition of redemption fine - penalty. HELD THAT - It would be appropriate that this appeal is remanded to the Tribunal by setting aside the impugned order dated 22nd March 2013 with a direction that the Tribunal on remand reconsiders the issue in the light of the decision of the larger bench in the case of M/S ITC LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, CHENNAI 2016 (4) TMI 280 - CESTAT CHENNAI . Appeal disposed off.
Issues involved:
The judgment involves issues related to the confiscation of goods, imposition of redemption fine, demand for extended period of limitation, revenue neutrality, double taxation, interpretation of cost of production, penalty under section 11AC, interest under section 11AB, and the application of Valuation Rules. Confiscation of goods and imposition of redemption fine: The Appellant-Assessee challenged the sustenance of confiscation of goods and imposition of redemption fine by the Appellate Tribunal. The Appellant argued that the goods were not available for confiscation, and the Tribunal did not follow the binding judgments. The Tribunal's decision was overruled by the Larger Bench, leading to a reframing of the question of law for consideration. Demand for extended period of limitation: The Appellant contested the demand for the extended period of limitation under section 11A of the Central Excise Act, 1944. Various facts were presented to support the contention that the impugned order was vitiated and did not consider relevant information that was raised earlier. Revenue neutrality and double taxation: The issue of revenue neutrality was raised, highlighting that the demand was revenue neutral as credit was available to the recipient factory. The Appellant argued against double taxation, emphasizing the calculation of assessable value and the distinction between cost and value. Interpretation of cost of production: The central issue before the Court was the determination of the cost of production in the case of interunit transfer of goods for captive consumption. The dispute revolved around whether the cost of input should be based on the actual cost of production or a percentage of the cost of production in accordance with the Valuation Rules. Penalty under section 11AC and interest under section 11AB: The Tribunal's confirmation of penalty under section 11AC and interest under section 11AB was challenged. The Appellant questioned the correctness of the Tribunal's decision and sought reconsideration based on the larger bench's ruling. Conclusion: The Court remanded the case back to the Tribunal for reconsideration in light of the decision of the larger bench, setting aside the impugned order dated 22nd March 2013. All contentions of the parties were kept open, and the Tribunal was directed to expedite the proceedings and pass appropriate orders within six months.
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