9911796707
TMI Blog2023 (10) TMI 871X X X X Extracts X X X X X X X X Extracts X X X X ..... Cess of Rs. 2,78,564/- and Higher Education Cess of Rs. 15,333/-, totaling Rs. 1,38,48,559/- was confirmed along with equivalent penalty and interest under Section 11AC and 11AB respectively of the Central Excise Act, 1944. Aggrieved against the impugned order, the Appellant, M/s.SAIL-ISP has filed this appeal. 2. Briefly stated facts of the case are that the Appellant manufactures MS Ingots and structural (like angles, channels, joints etc.), which are intermediate products for further manufacture of finished steel products. Such MS Ingots and structural manufactured by them are cleared to their Durgapur Steel Plant, which is another unit of the Appellant Company and are also transferred to its various depots/ stockyard managed by its Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice was barred by limitation and extended period could not be invoked 5. The Appellant submits that the issue is no longer res integra as the issue has been decided in favour of the Appellant in the case of Ispat Industries Ltd. v. Commissioner of Central Excise Raigad - 2007 (209) E.L.T. 185 (Tri -LB), wherein it has been held that the provisions of Rule 8 of Central Excise Valuation Rules will not apply in a case where some part of the production is cleared to the independent buyers. This view taken by the Tribunal has been relied upon in a catena of decisions including - a. Commissioner of Central Excise, Aurangabad v. Sterlite Optical Technologies Ltd. - 2018 (359) E.L.T. 723 (Tri. - Mumbai) b. Shiv Shakti Ingots Ltd. v. Commr. Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll not be applicable if apart from captive consumption, independent sales are also taking place directly from the factory gate or the depot of the manufacturer. Accordingly, they argued that the instant demand is unsustainable. 7. The Appellant further submits that the entire exercise is Revenue neutral, since the other unit of the Appellant would be eligible to take credit. Therefore, in a revenue neutral situation, duty demand cannot be imposed. Accordingly, they contended that penalty imposed is also not sustainable. 8. The Ld.A.R. Reiterated the findings in the impugned order. 9. Heard both sides and perused the appeal records. 10. We observe that the issue to be decided in the present appeal is Whether the Appellant is liable to pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... strict the applicability of Rule 8 to cases where the entire production was being captively consumed, the Rule would have simply stated "where excisable goods are consumed by an assessee himself or on his behalf in the manufacture of other articles" instead of preceding the above expression with the words "where the excisable goods are not sold". This view is also supported by the judgment of the jurisdictional High Court in the case of Indian Drug Manufacturers Association v. Union of India, wherein the Court held that Rule 8 applies in a situation where goods are not sold but are cleared 'exclusively' to be used in consumption or for manufacture of other articles. We also agree with the contention of the assessee that Rule 8 will apply on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Rule 4 deserves acceptance. XX XX XX XX XX XX XX XX XX 9. In view of what we have observed above, we answer the reference in the following terms : (a) the provisions of Rule 8 of the Valuation Rules will not apply in a case where some part of the production is cleared to independent buyers; (b) the provisions of Rule 4 are in any case to be preferred over the provisions of Rule 8 not only for the reason that they occur first in the sequential order of the Valuation Rules but also for the reason that in a case where both the rules are applicable, the application of Rule 4 will lead to a determination of a value which will be more consistent and in accordance with the parent statutory provisions of Section 4 of the Central ..... X X X X Extracts X X X X X X X X Extracts X X X X
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