2024 (3) TMI 65 - AT - Central Excise

Issuance of second SCN without adjudicating first SCN - Valuation - adoption of incorrect valuation for goods cleared to its depot on normal transaction value which should have been cleared on the latest aggregate quantity of goods sold as against the price at which most number of goods were sold - violation of Rule 7 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - HELD THAT - After adjudication order in respect of first show-cause notice was issued that had attained finality by dropping the demand by the CESTAT on 11.01.2018, the other show-cause notice was pursued and adjudication order was passed subsequent thereto. It seems that ignoring all legal provisions including the constitutional right of protection against double jeopardy that is being tried repeatedly for the same act of alleged omission despite a clear finding of the Hon'ble Supreme Court made in Osaka Alloys And Steels Pvt. Ltd. 2007 (9) TMI 615 - SC ORDER that even without adjudication of the first show-cause notice, issue of second show-cause notice raising the demand is without jurisdiction, besides being time barred and in LUPIN LIMITED VERSUS UNION OF INDIA 2012 (6) TMI 785 - GUJARAT HIGH COURT it was also held that issue of another show-cause notice without any new material would be wholly futile and prejudicial to the Assessee and would be an abuse of the process of law. The order passed by the Commissioner of Central Tax (Appeals-I), Pune on the basis of a subsequent show-cause notice, after the first was held to be not sustainable by the CESTAT, is without jurisdiction and the same is, therefore, set aside with consequential relief - Appeal allowed.

Summary

Issues:
Confirmation of duty demand based on incorrect valuation of goods under Central Excise Valuation Rules.

Issue 1: Incorrect valuation of goods
The Appellant's duty demand of Rs. 50,16,878/- for the period from April, 2001 to July, 2005 was confirmed due to assessing the value of goods manufactured incorrectly under Rule 7 of the Central Excise Valuation Rules, 2000 and Section 4 of the Central Excise Act, 1944. The Additional Commissioner of Central GST, Kolhapur's order for recovery was affirmed by the Commissioner of Central Tax (Appeals-I) Pune, leading to the dispute reaching the present forum.

Facts and Arguments:
The Appellant manufactures 'Yeast' and clears it from the factory gate and depots by paying excise duty. The Department alleged that the Appellant undervalued goods cleared to its depot based on the latest aggregate quantity of goods sold, contrary to Rule 7 of the Central Excise Valuation Rules, 2000.

Legal Submissions:
The Appellant's Counsel cited various Tribunal and Supreme Court decisions to support the correct valuation method used by the Appellant. They argued against the invocation of the extended period and issuance of multiple show-cause notices for the same period, citing legal precedents against such actions.

Department's Response:
The Authorised Representative for the Department supported the order passed by the Commissioner (Appeals) and referred to a circular to justify the valuation method used. They relied on previous Tribunal judgments to justify the Department's stance.

Judgment:
The Tribunal noted that the Department had issued two show-cause notices for the same period, despite a previous order dropping the demand for the same set of facts. This was deemed a violation of the Appellant's rights against double jeopardy. The subsequent show-cause notice was held to be without jurisdiction, and the order passed by the Commissioner (Appeals) was set aside.

Conclusion:
The appeal was allowed, and the order of the Commissioner of Central Tax (Appeals-I), Pune was deemed without jurisdiction. The Tribunal provided consequential relief, if any, to the Appellant.