9911796707
TMI Blog2024 (7) TMI 379X X X X Extracts X X X X X X X X Extracts X X X X ..... earing their finished products, namely, Sucralose and FOS as under :- (i) 'Stock transfer' for captive consumption to the other units and factories of the appellant situated at Daman, Baddi, Ankleshwar, Taleja and Mumbai. (ii) 'Sale' for captive consumption to M/s Surya Herbals Ltd. Noida for using the same for manufacture of 'Jeevanprash' for and on behalf of appellant. (iii) 'Stock transfer' for captive consumption to the related persons / sister concerns of the appellant, namely (a) M/s Indichemie Health Specialities Pvt. Ltd. situated at Daman and Baddi (b) M/s Galpha Laborites Situated at Ankleshwar a Baddi for using the same in manufacture of pharmaceutical products for and on behalf of appellant. (iv) 'Sale' to the related pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose for manufacture of their pharmaceutical (API and Formulation) Product. So also appellant contravened the Provision of Section 4 (i) (b) of Central Excise Act, 1944 r/w Rules 8, 9 and proviso to Rule 9 of the Central Excise Valuation Rules, 2000 as the valuation of FOS and Sucralose cleared by them to M/s Surya Herbals Ltd. is to be 110% of the cost of production as per CAS-4 issued by Cost Accountant. 3. In view of the above, show cause notice dated 29.08.2011 was issued invoking the extended period alleging suppression of facts with intent to evade payment of duty for the period 2006-07 to 2009-10 and proposing to demand:- (a) The differential central excise of Rs. 6,40,096/- in respect of stock transfer of the goods to their other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le 8 will apply. 4.1 The decision in the case of Ispat Industries Ltd Vs CCE - 2007 (209) ELT 185 (Tri-LB) was relied to support the above arguments. It is prayed that the appeal may be allowed. 5. The Learned AR Shri R. R. Kurup appeared and argued for the department. The finding in the impugned order was reiterated. 6. Heard both sides. 7. The issue to be considered is whether the assessable value is to be determined applying Rule 8 of Central Excise Valuation Rules, 2008 and whether the demand, interest and penalties are legally sustainable. Undisputedly the appellant is clearing goods to independent buyers also. The Ld. Counsel has adverted to the worksheet appended along with the reply to the SCN to submit that there is no variatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upported 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 only in two situations, (a) where the goods are consumed by him in the same factory (captive consumption) or (b) where such goods are transferred to another factory for consumption in the manufacture of other articles on behalf of the assessee. In this case, it is not the case of the revenue that the goods were transferred to other units for manufacture of other artic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntial application of various rules, the same, in our view, is the only reasonable way to read these rules. Any other interpretation would only lead to confusion and chaos. Since the applicability of Rule 4 is not really in dispute, there was no need to look further and regardless of the applicability or otherwise of Rule 8, the assessable value should have been determined in terms of Rule 4 of the Valuation Rules. 8. The conclusion that we are drawing in the present case would lead to determination of a value which, in our view, will not only be reasonable but also consistent with the provisions of Section 4 of the Central Excise Act. We would, at this stage, draw support from the judgment of the Supreme Court in the assessee's own case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Excise Act, 1944. 10. The papers are now returned to the referral Bench for passing orders on the appeal." 7.1 In the above case, the Larger Bench has held that the provisions of Rule 8 will not apply in a case where some parts of the production are sold to independent buyers. So also in a situation where both Rule 4 and Rule 8 would apply, by sequential order, Rule 4 would take precedence ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
