2024 (3) TMI 910 - AT - Central Excise

Method of valuation - calcined alumina - to be valued in accordance with Rule 4 or 11 of Central Excise Rules, 2000 by considering normal transaction value of sale of calcined alumina (Smelter) of normal transaction value? - invocation of extended period of limitation - HELD THAT - On going through the technical specifications, it is clear that technical specification of both the products is different as having variation in the composition. Moreover, the calcined alumina (sale) is sold by the assessee in in PP bags of 50 kgs each whereas the calcined alumina (Smelter) is sold in bulk or loose form. Both the products are two different products and there is no allegations in the impugned showcause notice that the assessee is clearing calcined alumina (smelter) to independent buyers. Therefore, the valuation adopted by the assessee under Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules,2000, is correct and they have paid duty correctly - Otherwise also, the assessee is clearing the said goods to their sister unit, therefore, it is the situation of revenue neutrality. In that circumstances also, the differential duty cannot be demanded. There are no merit in the impugned order demanding duty from the assessee for the normal period of limitation - also there are no merit in the appeal filed by the Revenue to demand duty from the assessee by invoking extended period of limitation - the appeal filed by the assessee is allowed.

Summary

Issues involved:
The issues involved in the judgment are the valuation of calcined alumina (Smelter) cleared to a sister unit, the differentiation between calcined alumina (Smelter) and calcined alumina (Sale), and the applicability of the extended period of limitation for demanding duty from the assessee.

Valuation of calcined alumina (Smelter) cleared to a sister unit:
The assessee manufactured two types of calcined alumina during the impugned period, one for supplying in bulk form to the company's sister unit and the other for selling to final customers in PP bags. The assessee started paying duty on calcined alumina (Smelter) as per Rule 8 of the Central Excise Valuation Rules, 2000. The adjudicating authority proposed duty payment based on normal transaction value, but the tribunal held that the products were different and the valuation method adopted by the assessee was correct.

Differentiation between calcined alumina (Smelter) and calcined alumina (Sale):
The technical specifications of both products were analyzed, revealing variations in composition. Calcined alumina (Sale) was sold in PP bags of 50 kgs each, while calcined alumina (Smelter) was sold in bulk. The tribunal concluded that both products were distinct, and since the assessee was clearing goods to their sister unit, there was no revenue impact. Therefore, no differential duty could be demanded.

Applicability of extended period of limitation:
The tribunal found no merit in the impugned order demanding duty within the normal period of limitation or in the appeal filed by the revenue invoking the extended period of limitation. Consequently, the appeal filed by the assessee was allowed, and the appeal filed by the revenue was dismissed.