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TMI Blog2017 (8) TMI 1218X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacturers of insecticides / pesticides. They classified the goods under CETA 3808.10 of the CETA 1985 on payment of central excise duty at 8% from their factory, to the depots for repacking and ultimate sale. For the purposes of discharging duties on such bulk clearances, the assessee determined the values of the goods based on cost construction method under Section 4 (1) (b) of the Act read with Rule 6 (b) (ii) of Central Excise Valuation Rules, 1975. Appellants were issued with periodical SCNs from 1.6.1995 to 30.06.2000 proposed classification of the product under CETA 3824.90 attracting higher rate of duty. Department also took the view that there was no sale of bulk goods at the factory gate and goods entered the market only after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 007 upheld the order of original authority. Hence assessee is before this forum in Appeal E/629/2007. 2. Department has also filed appeal [E/529/2007] seeking to set aside the impugned order dt. 16.04.2007 passed by Commissioner (Appeals) to the extent that it relates to the observation that CAS-4 is applicable to all pending matters. 3. On 31.07.2017, when the matter came up for hearing, assessee was represented by Shri S.S. Gupta, Ld. Consultant who reiterated the grounds of appeal and also made oral submissions which can be summarized as under : (i) The issue pertains to the period 1.4.1996 to 30.06.2000 on valuation of pesticides cleared from their factory to the depots for repacking and ultimate sale therefrom. (ii) In the original ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liability that may arise after extending CAS-4 standards to clearance of KARATE during the impugned period. (vii) Ld. Counsel contends that even after such adjustment, according to their calculation, an amount of Rs. 1,62,30,208/- would still have been paid in excess by assessee as excise duty for the remaining products. However, ld counsel states that no refund is being sought on this amount. (viii) On the matter of penalty, Ld. Consultant contends that the entire issue of classification of the pesticides was in litigation till it was finally decided by Hon ble Supreme Court in Union of India Vs Pesticides Manufacturing and Formulation Association of India reported in 2002 (146) ELT 19 (SC). Thus there was considerable uncertainty about ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng with cost of production as arrived at in cost audit report. 2.1 In the circumstances, appellant is wrong in contending that cost of production can be arrived at on the basis of CAS-4 standards, since those standards had been introduced and were brought into force only vide Board s circular dt.13.2.2003. 2.3. Appellant cannot therefore take recourse to a new method of costing which was not at all in force during the impugned period and was introduced only in 2003. 2.4 With regard to departmental appeal (E/529/2007), Ld. A.R reiterated the grounds of appeal. 5. Heard both sides and have gone through the facts. 6. The core issue that comes up for appellate decision in both these appeals is whether the cost of production of captively ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dmittedly, the overhaul of the Section 4 of the Central Excise Act and that of the Valuation Rules was effected in 2000 as a response to the large number of disputes that had been festering in respect of valuation of final products and valuation of captive consumption of goods etc. The Board s circular dt. 13.2.2003 has issued the advisory to follow CAS-4 standards for determining the assessable value in respect of captive consumption goods. Ostensibly, this has been done with an intent to ensure that cost is determined in line with universally acceptable standards of costing expressing CAS-4 standards. In such a situation, in respect of disputes on valuation of captive consumption goods, which have been pending even after 2000, the adoptio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the products other than Karate . The amount so excess paid would come to 2.38 Crores. The Learned Counsel has submitted that appellant has no intention for filing refund. In the case of Divya Enterprises Ltd. in a similar situation it was directed to give adjustment of the excess duty paid. On the peculiar facts of this case and taking note of the circumstances by which the appellant paid excess duty on three products which all revolves around the application of CAS-4 cost construction method which was under much dispute and confusion during the relevant period, we are of the view that the plea of the appellant for adjustment of the excess paid duty towards the demand requires to be allowed and we order accordingly. 6.6 On the issue of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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