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TMI Blog2023 (5) TMI 720X X X X Extracts X X X X X X X X Extracts X X X X ..... s of revenue to the exchequer. The demand confirmed in the impugned order is not sustainable. Since the demand itself is not sustainable, the interest demanded and the penalty imposed against the Appellant in the impugned order is also not sustainable - Appeal allowed. - Excise Appeal No. 631 of 2012 - FINAL ORDER NO. 75416/2023 - Dated:- 16-5-2023 - HON BLE SHRI P. K.CHOUDHARY , MEMBER ( JUDICIAL ) And HON BLE SHRI K. ANPAZHAKAN , MEMBER ( TECHNICAL ) Shri Rahul Tangri Shri Dipankar Majumdar , both Advocates for the Appellant (s) Shri K.Chowdhury , Authorized Representative for the Revenue ORDER Per : K. ANPAZHAKAN : M/s. Hindalco Industries Ltd., Hirakud Complex (hereinafter referred to as the Appellant ) are engaged in the activity of manufacturing and clearance of aluminium ingots and aluminium coils falling under chapter 76 38, respectively of the First Schedule of Central Excise Tariff Act. Apart from the Hirakud Unit, the Appellant are having their other units viz., Muri, Belgaum, Mauda, Taloja, Belur etc. There is inter unit transfer of goods between these units in the course of such manufacturing activity. In the present case, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to March 2010 under the proviso to Section 11A(1) of the Central Excise Act, 1944 along with interest under Section 11AB of the Central Excise Act and penalty under Section 11AC was also proposed. Extended period of limitation was invoked in the show cause notice by alleging suppression with an intent to evade payment of duty at the Appellant s end. The entire demand proposed in the show cause notice was beyond the normal limitation period of limitation of one year. 6. The said show cause notice was adjudicated vide the impugned order dated 28.06.2012 wherein it was observed as under:- The adjustment of excess paid duty with short paid duty is not permissible since the assessments are final and also because there is no statutory provision allowing for the same. The statute nowhere provides for any concept of revenue neutrality as an argument to not comply with the provisions of law. Short payment of duty cannot be waived in the guise of revenue neutrality. The Appellant had intentionally suppressed information from the department and had intentionally short paid the duty and therefore, extended period of limitation was rightly invoked in the show cause notice. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant submits that the entire issue is revenue neutral in nature as any duty charged on the invoices based on which goods are cleared, the other unit of the Appellant was eligible for claiming CENVAT Credit on the same. Further, duty paid by the other units through PLA was much more than the differential demand of duty in the present case. Thus, even if the short payment alleged in the present case was paid by the Appellant during the relevant period, the recipient unit of the appellant would have correspondingly paid lesser duty from PLA during the same period. Accordingly, the situation is totally revenue neutral. 7.5 Thus, when the entire issue is revenue neutral in nature, there is no loss to revenue to the exchequer. In support of this argument, the Appellant reliesd upon the following decisions: a. CCE, Pune Vs. Coca-Cola India Pvt.Ltd., 2007 (213) ELT 490 (SC); b. CCE C, Vadodara-II Vs. Indeos Abs Ltd. 2010 (254 ELT 628 (Guj.), affirmed by the Hon ble Supreme Court in [2011 (267) ELT A155 (SC)]. 8. The Appellant further submits that SCN dated 05.09.2011 relating to the period December 2009 to March 2010 is beyond the period of one year and hence time ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant stated that on many months they have paid duty in excess of the duty payable as per CAS-4 Certificate issued at the end of the year. Only for few months there was a short payment of duty. If the excess paid duty is adjusted with the short payment then overall there was an excess payment of duty and hence there is no demand liable to be confirmed. The Appellant stated that they have brought the excess payment to the notice of the Adjudicating authority. However, the Adjudicating authority refused to adjust the excess payment against the short payment. They have cited various decisions in support of their case that the short payment of duty can be adjusted against excess paid duty, some of which are as follows:- a. Pr.Commr. of CGST C.EX. Headquarters Bhopal v. Godrej Consumer Products Ltd. [2019 (367) ELT 985 (MP) wherein it has been held as under:- 7. The Tribunal while relying on the decision in Jindal Steel Power Ltd. v. Raipur-1 - 2016 (342) E.L.T. 253 (Tri. - Delhi) and Essar Steel India Ltd. v. CCE, Raipur - 2017 (345) E.L.T. 139 reversed the order, holding : 7. We have considered the submissions made by both sides. The goods have been cleared by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arged at the time of removal of goods when the invoices are prepared. The legal position as submitted by the appellant cannot be contested. However, it is an admitted fact that the appellants themselves did not follow costing to arrive at deemed transaction value for each clearance. They have considered a period of many months and worked out the costing, in terms of CAS-4 for that period and paid duty. Thereafter, they revised said costing when there are changes in raw material cost. That being the case, we find that the reliance placed by the appellant on the principle that time of removal is relevant and, hence, annual costing is not tenable, is unsustainable. The fact remains that while the duty liability has to be discharged at the time of removal of excisable goods in a situation where there is no sale transaction and known value, the deemed transaction value has to be constructed based on costing method which necessarily will involve an averaging of cost for a period, considering all the parameters. It is neither the case of the appellant nor there is such an approved standard for arriving at cost of excisable goods for each individual clearance. 7. Now, the question re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nual costing. As such when the Department arrived at cost on annual average basis the duty liability, excess or shortage has also to be determined on such basis. It is not tenable while for arriving at per unit duty liability the whole year data is considered for costing, for total duty liability only months when short payment was noticed were considered. In other words when CAS-4 based annual costing formed basis for arriving transaction value, the overall duty liability/short payment should be arrived at after considering duty already paid during that year on such goods. We find the reasoning given by the Original Authority against adjustment of already paid duty as untenable. Section 11B has no application in such situation, when the appellants duty liability is determined on annual CAS-4, the duty already paid during said period has to be adjusted. The question of unjust enrichment has no relevance here. There is no refund considered here. The point that the duty paid in excess in certain months has been availed as credit by sister unit hence, cannot be adjusted towards short payment also not tenable. The demand arose based on annual costing. Such cost price in terms of Rule 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ster unit. This the entire exercise is revenue neutral. In support of their argument the Appellant cited the following decisions:- a. Commissioner of C.Ex., Pune v. Coca-Cola India Pvt.Ltd. [2007 (213) ELT 490 (S.C.)] Classification of goods - Revenue neutrality - Classification of non-alcoholic beverage bases/concentrates manufactured by assessee which are supplied to bottlers, who in turn use the same as raw material in manufacture of beverages - Excise duty payable on beverage bases/concentrates and Modvat credit availed under Notification No. 5/94- C.E. (N.T.) is identical hence, consequences of payment of excise duty after availing Modvat credit was revenue neutral - In view of such stand being taken by assessee, appeals dismissed leaving question of law open. [paras 6, 7] b. Commr. of C.Ex. Cus., Vadodara-II v. Indeos ABS Limited [2010 (254) ELT 628 (Guj.)] Demand - Undervaluation - Revenue neutrality - Tribunal disposed of appeal holding that since goods cleared to sister concern, whatever duty payable available as credit to own unit (sister concern) hence entire exercise revenue neutral - Grievance now that undervaluation not considered by Tribunal - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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