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TMI Blog2016 (9) TMI 785X X X X Extracts X X X X X X X X Extracts X X X X ..... ng, should be provided and read into a provision. Reading of Rule 6(b)(i) of the Central Excise (Valuation) Rules, 1975, in our considered view does not mandate the Jurisdictional Superintendent, Central Excise to provide an opportunity of hearing, for computation of duty to be paid by an assessee. In the light of the discussion and various decisions, we are of the considered view that the directions of the Tribunal, to the Jurisdictional Range officer to provide an opportunity of hearing, is not in accordance with the scheme of the Act and the rules framed thereunder, and hence the directions are liable to be set aside and accordingly set aside. Whether the directions issued by the Tribunal to the Jurisdictional Superintendent to consider the submission of the assessee, in the light of the decision in Dai Ichi Karkaria Ltd. vs. Collector of Central Excise, Pune, reported in [1996 (1) TMI 179 - CEGAT, NEW DELHI] has to be followed or not - Held that:- in the case on hand, provisional assessment has been directed to be finalised as per the order-in-original dated 22.05.1998 passed by the Assistant Commissioner of Central Excise, Central Excise Division, Cuddalore. Dai Ichi Karkar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t authority, which is put to challenge on the facts and circumstances of the case, what is required to be considered is whether, it affects the interests of the assessee. It cannot be said that the assessee would not be prejudiced, if valuation is not done as per the decision of the Hon'ble Apex Court. Admittedly, the judgment of the Hon'ble Supreme Court, was not placed before the authorities. Adjudicating authority has directed the Superintendent to finalise the RTI2 assessment and report compliance. Perusal of the letter dated 20.11.1998, also shows that after computation, the Superintendent has marked a copy of the same to the adjudicating authority. In ordinary circumstances, this court would hold that an appeal against the letter of the Superintendent is not maintainable, in the light of Flock India Pvt Ltd.'s case (supra) But inasmuch the assessment has been directed to be finalised as per the directions of the adjudicating authority, we are not inclined to accept the contentions of the appellant, on the third question of law. We make it clear that this judgment shall not be treated as a precedent. - Appeal disposed of - C.M.A. No. 700 of 2012 - - - Dated:- 23-8-2016 - S. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same. He then ordered the value to be arrived in terms of the Rule 6b(ii) of the Central Excise (Valuation) Rules, 1975 and the assessments of RT 12s be finalised in line with the conclusion of this order. The respondent did not challenge the order of the Assistant Commissioner. It has reached finality. 4. The Superintendent of Central Excise, Range I Cuddalore, quantified the differential duty payable by the respondent, in terms of the Order-in-Original No.30 of 1998, dated 22.05.1998, while arriving at the costs, in terms of Rule 6(b)(ii) of the Central Excise (Valuation) Rules, 1975, by including the duty element on the inputs and communicated the same, vide letter O.C.No.1251/98, dated 20.11.1998. Then, the respondent has filed an appeal in A.No.80 of 1999, against the Superintendents letter, dated 20.11.1998, before the Commissioner of Central Excise (Appeals), Tiruchirapalli. Due to re-organisation of the jurisdictions in November 2002, the appeal was subsequently, transferred to the Commissioner of Central Excise (Appeals), Chennai. The appeal was renumbered as Appeal No.249/2002-(P) and disposed of the same, vide Order-in-Appeal No.216 of 2003(P), dated 12.06.2003. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;ble Tribunal in Final Order No.515 of 2010, dated 04.05.2010, was correct in remanding the issue to the Superintendent, who is not empowered under the statute to issue orders for finalization of provisional assessment? (2) Whether the Hon'ble Tribunal, while passing Miscellaneous Order No.371/2011, dated 25.07.2011, was correct in dismissing the department's application was Rectification of Mistake E/ROM/62/2010, in Final Order No.515 of 2010, dated 04.05.2010, wherein, grounds for rectification of mistake had been raised on the lines of the foregoing questions of law? (3) Whether the appeal filed against the Superintendents letter O.C.No.1251 of 1998, dated 20.11.1998 issued in pursuance of and in execution of the Assistant Commissioner's Order-in-Original 30/1998, dated 22.05.1998, is maintainable, in view of the Hon'ble Supreme Court judgments in the case of Flock India Pvt. Ltd., reported in 2000 (120) ELT 285 and Priya Blue Industries Ltd., reported in 2004 (172) ELT 145? 10. Referring to Rule 9B(6) of the erstwhile Central Excise rules, 1944, which states that, In cases of provisional assessment, the final assessment shall be made by the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in any other proceeding. 15. Per contra, the respondent has submitted that they are the manufactures, inter alia, denatured ethyl alcohol, at its plant at Kadampuliyur, in Cuddalore District and clears the same to its own factories for manufacture of other Final Products. Assessments were subjected to provisional assessment, in terms of Rule 9B of the Central Excise Rules, 1944, by an order dated 17.10.1994. The Assistant Commissioner ordered for provisional assessment, on account of a dispute, on the method of valuation to be adopted for the de-natured ethyl alcohol cleared for captive consumption. However, the Departments stand was that valuation was required to be done in terms of Rule 6b(i) of the erstwhile Central Excise Valuation Rules, 1975, on the basis of the value of comparable goods. On the other hand, the assessees case was that since no comparable goods were being cleared by other manufacturers, the methodology provided under Rule 6b(i) of the said Valuation Rules, would alone be applicable. In terms of Rule 6b(ii), value is required to be determined the basis of cost of production plus notional profit. 16. The respondent has further submitted that four Show C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fferential duty. The Commissioner Appeals, without going into the merits of the case dismissed the appeal, on the ground that the Order in Original, dated 22.05.98, had not been challenged by the respondent. On Appeal to CESTAT against this Order, the Tribunal, after taking into account the valuation dispute, passed an order, dated 04.05.2010, and noticing that the Superintendent has not given an opportunity of hearing before directing the respondent to pay the differential duty, remitted the case for fresh decision on merits, after taking into account the judgment in Dai Ichi Karkaria's case. The Revenue filed an application for rectification of mistake, wherein, it was admitted that the issue on merits was settled by the Hon'ble Supreme Court in favour of the respondent in the case of Dai Ichi Karkaria, reported in 1999 (112) ELT 353. The rectification of mistake petition came to be dismissed. The respondent has submitted that the decision of the Tribunal is in accordance with Dai Ichi Karkaria's case, and therefore, there is no need to interfere. It is also submitted that when there is a violation of the principles of natural justice, there is nothing wrong in direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... find that there is no indication as to the inclusion of duty elements on the raw materials used. In case, the same is not added so far, it may be added in the value to arrive at assessable value, as cost of the product includes duty suffered on the raw materials as well as other expenses like transportation cost of the same. ORDER I hereby order that in all the cases covered by the show cause notices issued in C.No.V/Ch 72/17/31/94 VC dt.16.3.95 13.2.96 and C.No.V/R.II and 17/20/97 VC dt. -.2.97 and C.No.V/RI and 17/20/97 VC dt.21.5.97, the proceedings initiated for adoption of the value of the DNS sold by M/s.EID Pary (I) Ltd. in the assessee's case are dropped. 2. The value is ordered to be arrived at in terms of the Rule 6 b(ii) of the Central Excise (Val) Rules, 1975 and the assessments of RTI2s be finalised in line with the conclusion of this order. 3. Duty if any short paid is ordered to be paid in terms of Rule 9B(5) of the Central Excise Rules 1944 immediately. While doing so, the Assistant Commissioner of Central Excise, Cuddalore Division has directed the Superintendent (Tech), Central Excise Division, Cuddalore, to quantify the differential ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e financial year 1997-98. No appeal was preferred against this order by the Appellants. Thus this order has attained finality. Based on this order, the Superintendent of Central Excise, Range I, Cuddalore issued a letter bearing OC No.1251/98 dated 20.11.98 directing the Appellant to pay differential duty of ₹ 1,14,29,086/-. This impugned Appeal has been filed against this letter of the Superintendent, and thereby indirectly challenges the Order-in-Original No.30/98 which was not appealed against. I am unable to accept the plea of the Appellant. Order-in-Original No.30/98 has attained finality by reason of it not being challenged before any higher appellate forum. The Hon'ble Supreme Court in CCE Vs Flock India Pvt. Ltd. reported in 2000 (120) ELT 285 SC has held Non challenge of an appealable order - attains finality - cannot be challenged by refund claim . This ratio is directly applicable to the facts of the present case. Appeal rejected. 23. Being aggrieved by the same, the respondent M/s.Chemplast Sanmar Ltd., Chennai has filed Appeal No.E/695/03 before the CESTAT, Chennai. Adverting to the rival submissions, and accepting the contentions of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew of the above facts, they pleaded for accepting the cost construction declared by them under Rule 6(b)(ii) of Valuation Rules, 1975 and for dropping further proceedings. 26. Accordingly, the Assistant Commissioner of Central Excise, Cuddalore, has passed Order-in-Original in No.30/98 dated 22.05.1998 dropping proceedings under Rule 6(b)(i) of the Central Excise (Valuation) Rules, 1975 and ordered as hereunder: 1. The value is ordered to be arrived at in terms of the Rule 6 b(ii) of the Central Excise (Val) Rules, 1975 and the assessments of RTI2s be finalised in line with the conclusion of this order. 2. Duty if any short paid is ordered to be paid in terms of Rule 9B(5) of the Central Excise Rules 1944 immediately. While doing so, the Assistant Commissioner of Central Excise, Cuddalore Divsion has also directed the Superintendent (Tech), Central Excise Division, Cuddalore, to quantify the differential duty, if any, due to the inclusion duty element on the raw material and finalise the RTI2 assessment accordingly and report compliance. 27. As rightly contended by the learned senior standing counsel for the Central Excise and Service Tax Department, reasona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a case where a related person sell the goods in the course of wholesale trade to buyers, other than dealers and related persons, and the class to which such buyers belong is known at the time of removal, on the basis of the price at which the goods are ordinarily sold by the related person to such class of buyers. 29. Rule 6 deals with the details to be taken note of and the methodology to be adopted, in determining the value of excisable goods under assessment. Reading of the Order-in-Original is also indicative, as to how it has to be done, by taking note of the manufacturing cost, manufacturing profit and inasmuch as copies of the certificates produced by the respondent did not indicate, as to the inclusion of duty element on the raw materials used, the Assistant Commissioner of Central Excise, Cuddalore has observed that in case the same is not added so far, it may be added in the value to be arrive at assessable value as cost of the products includes duty as well as other expenses like transportation cost of the same. He has also directed the Superintendent (Tech), Central Excise Division, Cuddalore to quantify the differential duty, if any, and to finalise the RTI2 asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter of determining the age of a High Court Judge, in accordance with Article 217 of the Constitution of India, at Paragraph 25, the Hon'ble Apex Court, held as follows: Article 217(3) does not guarantee a right of personal hearing. In a proceeding of a judicial nature, the basic rules of natural justice must be followed. The respondent was on that account entitled to make a representation. But it is not necessarily an incident of the rules of natural justice that personal hearing must be given to a party likely to be affected by the order. Except in proceeding in courts a mere denial of opportunity of making an oral representation will not without more vitiate the proceedings. A party likely to be effected by a decision is entitled to know the evidence against him, and to have an opportunity of making a representation. He, however, cannot claim that an order made without affording him an opportunity of a personal hearing is invalid. 31.3. In Swadeshi Cotton Mills etc., v. Union of India reported in AIR 1981 SC 818, the Hon'ble Apex Court, at Paragraph 42, held as follows: In short, the general principle-as distinguished from an absolute rule of uniform a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of differential duty on the basis of the cost of denatured ethyl alcohol worked out for the financial years 1994-95, 1995-96, 1996-97, 1997-98, while including the input duty paid, cannot be said to be an adjudicatory function, to be discharged by the Superintendent and therefore, an opportunity of hearing is not required. If the arguments of the learned counsel for the respondent/assessee have to be accepted, thus terming computation of the differential duty, to be arrived at by a jurisdictional superintendent of Central Excise, as adjudicatory and therefore opportunity of hearing to all the cases to be given, then, in our considered view, there is no end and it would produce disastrous results of issuing show cause notices by the Superintendents of the Central Excise Department to all the assessees, who submit their returns, hear and determine the value of excisable goods under assessment. In the case on hand, directions have been given by the Adjudicating authority, as to how the valuation and computation of differential duty, if any, has to be done. 33. Functions of an adjudicating authority is quasi judicial and thus while issuing a show cause notice, besides, requiring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rence to the above said judgment. As observed earlier, there was no challenge to the order-in-original and therefore, when the appeal was filed against the letter of the Superintendent of Central Excise, Range 1, Cuddalore directing the respondent/assessee to pay the differential duty of ₹ 1,14,29,086/-, the appellate authority has rejected the same, stating that the assessment had attained finality. The Appellate authority has passed the order on 12.06.2013, by which time, the Hon'ble court in Collector of Central Excise, Pune vs. Dai Ichi Karkaria Ltd reported in 1999 (112) ELT 353 SC has approved the decision of the Tribunal, and at paragraph Nos.16 to 19 and 24 to 26, the Hon'ble Apex Court discussed and ordered, as hereunder: 16. The Central Excise Rules, in Chapter V AA, deal with The credit of duty paid on excisable goods used as inputs. The relevant Rules are Rule 57A to Rule 57J. Sub rule (1) of Rule 57A reads thus : (1) The provisions of this section shall apply to such finished excisable goods (hereinafter referred to as the final products), as the Central Government may, by notification in the Official Gazette, specify in this behalf, for the purp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty of excise, such duty excise shall be the amount of credit that has been availed in respect of such inputs under rule 57A. Rule 57G provides that the manufacturer intending to take credit of duty paid on inputs must file a declaration with the concerned excise officer indicating what the final products are that are manufactured in its factory and the inputs intended to be used therein and obtain an acknowledgment thereof. The manufacturer, having filed the declaration and obtained the acknowledgement, can take credit for the duty on the inputs received by him. Rule 57I provides for the recovery of credit wrongly availed of or utilised in an irregular manner. The manufacturer is then required to show cause why he should not be disallowed such credit, or, if it has utilised it, why its value should not be recovered from him. After considering the reply, the concerned excise officer is empowered to make the appropriate order in such terms. 17. It is clear from these Rules, as we read them, that a manufacturer obtains credit for the excise duty paid on raw material to be used by him in the production of an excisable product immediately it makes the requisite declaration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finished product. The real cost of the raw material (exclusive of freight, insurance and the like) to me is, therefore, ₹ 90/-. In reckoning the cost of the final product I would include ₹ 90/- on this account. This, in real terms, is the cost of the raw material (exclusive of freight, insurance and the like) and it is this, in our view, which should properly be included in computing the cost of the excisable product. 25. The view we take about the cost of the raw material is borne out by the Guidance Note of the Indian Institute of Chartered Accountants, and there can be no doubt that this Institute is an authoritative body in the matter of laying down accountancy standards. 26. To answer the question involved in these appeals, in determining the cost of an excisable product covered by the MODVAT scheme under Section 4(1)(b) of the Act read with Rule 6 of the Valuation Rules the excise duty paid on raw material also covered by the MODVAT scheme is not to be included. At paragraph 24, the Hon'ble Apex Court has ordered, as to how the real cost of the raw material (exclusive of freight, insurance and the like) should be reckoned, for which, Their Lord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above discussion and decisions, we are of the view that the range jurisdictional officer is bound to take note of the decision of the Hon'ble Apex Court and compute the value of excisable goods under assessment. We make it clear that while doing so, the jurisdictional officer is under no obligation in law to provide an opportunity of hearing to the assessee. He is required to only compute the value and the differential duty, as per the rule and decision of the Hon'ble Apex Court. 39. Civil miscellaneous appeal has been admitted on 09.04.2012, on the substantial questions of law, extracted supra. On the first substantial question of law, we are of the view that the directions of the Tribunal is only to consider the submissions of the respondent/assessee, for arriving at the value, and computation of differential duty. Inasmuch, provisional assessment had reached finality by the order of the adjudicatory authority, in which the respondent/assessee itself had agreed for application of Rule 6(b)(ii) of the Central Excise (Valuation) Rules, 1975, working out the valuation and the differential duty, if any, to be paid by the assessee, the letter of the Superintendent will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ays from the date of the communication to him of such decision or order : Provided that the Commissioner (Appeals) may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of sixty days, allow it to be presented within a further period of thirty days. (1-A) The Commissioner (Appeals) may, if sufficient cause is shown, at any stage of hearing of an appeal, grant time, from time to time, to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing : Provided that no such adjournment shall be granted more than three times to a party during hearing of the appeal. (2) Every appeal under this section shall be in the prescribed form and shall be verified in the prescribed manner.' 42. Adverting to the above question, it is required to consider the letter, dated 20/11/98 of the Range Jurisdictional Superintendent and, it is extracted hereunder: OFFICE OF THE SUPERINTENDENT OF CENTRAL EXCISE, RANGE-I, CUDDALORE O.C.No.1251/98 20/11/98 To M/s CHEMPLAST SANMAR LTD., KADAMPULIYUR PANRUTI. Gentlemen, Sub: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , and therefore you are required to pay the differential duty of ₹ 1,14,29,086/- as per details given under Worksheet III. Therefore in full compliance with the Order of the Asst. Commissioner of Central Excise, Cuddalore Division, you are requested to pay the differential duty of ₹ 1,14,29,086.00 (Rupees One Crore Fourteen lakhs Twenty Nine Thousand and Eighty Six only) relating to the finalisation of Assessment for the Financial Year 1997-98, within one week from the date of receipt of this letter and to furnish the particulars of the duty remittance to this office. The copies of Worksheets I, II III are enclosed herewith for reference and necessary action. Yours faithfully, (R.DHANDAPANI.) Encl : As above SUPERINTENDENT OF CENTRAL EXCISE, RANGE-I, CUDDALORE. Copy Submitted to The Assistant Commissioner, Central Excise Division, Cuddalore. (with enclosures) W.R.T.C.No.V/RI Cud/17/20/97 VC dated 22/5/98 Order-in-Original No.38/98. 43. The Range Jurisdictional Superintendent has valued the excisable goods, under assessment and arrived at the differential duty to be paid. He has further directed the assessee to pay the duty, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dai Ichi Karkaria's case (cited supra). 48. Whether it is in the form of a letter or an order of the competent authority, which is put to challenge on the facts and circumstances of the case, what is required to be considered is whether, it affects the interests of the assessee. It cannot be said that the assessee would not be prejudiced, if valuation is not done as per the decision of the Hon'ble Apex Court. Admittedly, the judgment of the Hon'ble Supreme Court, was not placed before the authorities. Adjudicating authority has directed the Superintendent to finalise the RTI2 assessment and report compliance. Perusal of the letter dated 20.11.1998, also shows that after computation, the Superintendent has marked a copy of the same to the adjudicating authority. In ordinary circumstances, this court would hold that an appeal against the letter of the Superintendent is not maintainable, in the light of Flock India Pvt Ltd.'s case reported in 2000 (120) ELT 285. But inasmuch the assessment has been directed to be finalised as per the directions of the adjudicating authority, we are not inclined to accept the contentions of the appellant, on the third question of law ..... X X X X Extracts X X X X X X X X Extracts X X X X
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