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TMI Blog2024 (7) TMI 1396X X X X Extracts X X X X X X X X Extracts X X X X ..... lization of provisional assessment indeed will naturally be treated to have done only following the said Order. It is also to be noted that certain verifications regarding the value and weight of DTS items and the items supplied by assessee s units for all items covered by commercial invoices are required to be done periodically, to ensure that at the time of finalization of assessment there will not be any need to check even figures with respect to any documents other than the commercial invoice.' There are no change in the facts or the circumstances and that all the objections/contentions urged here by the Ld. Joint commissioner stand answered, that is to say, this Bench has considered all such grievances of the department and has answered such grievances by resting on the office memorandum. The crux of the findings thus appears to be that as long as the revenue does not have any grievance against the Office Memorandum and as long as the assessee is not found to have violated the terms and conditions in the said office memorandum, the same is binding on both the assessee as well as the revenue - thus, setting aside of the assessments by the First Appellate Authority was uncal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e abatement of the value of DTS items based on the assessee s commercial invoices (which adopt the averaged rate per Kg) is not injurious but revenue oriented . He thus relies on the Office Memorandum issued by the Jurisdictional Commissioner of Central Excise and finalises the assessments under Rule 7 of the Central Excise Rules, 2002 by allowing abatement. 3. It thus appears that aggrieved by the above, the revenue preferred appeals before the First Appellate Authority inter alia contending that - (i) the assessee was not eligible to claim abatement on the value of bought-out items in the absence of any findings by the adjudicating authority regarding the availment of CENVAT credit on such brought out items; and (ii) the assessee in their submissions did not indicate the actual purchase price of bought-out items supplied directly to site, and the same was therefore not verified by the adjudicating authority. It was thus prayed before the First Appellate Authority by the Revenue-appellant therein, for setting aside the finalised assessments. 4.1. The First Appellate Authority having considered the available documents on record and after hearing the respondent before him, has chose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... verification of the actual purchase price of bought-out items was unnecessary and unwarranted since DTS goods were duty paid goods and were already assessed to value and duty at the supplier end has been paid. 4.5. The First Appellate Authority, however, did not agree with the contentions of the assessee BHEL and even on the second issue, he has accepted the department s prayer for setting aside the assessments. Vide common Orders-in-Appeal Nos. 34 to 47/2014 (M-III) (D), dated 08.10.2014, the First Appellate Authority has allowed the prayer of the department and thus has set aside the assessments thereby allowing their Appeals. It is strange to observe here that the revenue loss aspect has not at all been brought out on Record and nor the injury to the revenue brought out on record. We hence feel that the impugned order is incomplete. 5.1. It is against this common Order in Appeals that the present appeals have been filed by the Appellant. 5.2. Heard Ms. Charulatha, Ld. Advocate for the appellant-BHEL and Mr. Anoop Singh, Ld. Joint Commissioner, for the revenue. 5.3. We have carefully perused the documents placed on record and we have also gone through the judicial pronouncements ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oiler components and valves and valve parts etc. They supply boiler components to various power projects spread all over India on contract basis under provisional assessment of duty under Rule 7 of Cenvat Credit Rules, 2002. The present dispute is about goods supplied to Chennai Petroleum Corporation Ltd. (CPCL) and Tata Power Company Ltd. (TATA). Appellants had entered into agreement with CPCL TATA for supply of boiler equipment. While most of the equipments to be supplied were manufactured by appellants and cleared to customers site on payment of duty, certain bought out items (shop made) were procured from third party vendors and sent directly to site of the customers (DTS items). Appellants were clearing shop made goods on payment of excise duty. However, with respect to DTS items, no excise duty thereon was discharged by the appellants. However commercial invoices were issued by the appellants both for shop made goods and DTS supplies. Appellants had established a system of accounting wherein as and when despatches are effected, the same are accounted for in the packing slips generated in the system covering various excise invoices for the purpose of ascertaining actual quanti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons which can be broadly summarised as under : (i) For both shop made and DTS supplies, the appellant issues commercial invoices to the customers. The value of the supplies in the invoices is arrived at by multiplying the total weight of supplies made with the estimated Rate/Kg. This manner of valuation has been agreed upon by the CCE in the Office Memorandum dated 22.12.2004. (ii) Para 10 of the O.M. explicitly stated that the value mentioned in the commercial invoice issued by the appellant on the basis of Estimated Value of Goods Sold ( EVGS ) should be taken for the purpose of deduction of DTS supplies than the cost of procuring the items (as mentioned in the vendor s invoice). Further, para 15 (iii) of the memorandum states that during the finalization of provisional assessment, the deduction for DTS supplies will be based on the EAVGS (Estimated Assessable Value of Goods Sold) as mentioned in the commercial invoice of the Appellant. (iii) For the purpose of valuation for DTS supplies, the cost plus method was specifically discussed at para 9 of the O.M. Under this method, DTS supplies will have to be valued at actual costs (as per vendor invoice) plus a reasonable margin for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iance is placed on the decision of the Hon ble High Court of Karnataka in Toyota Kirloskar Auto Parts Pvt. Ltd. Vs CCE LTU Bangalore [2012 (276) ELT 332 (Kar)], wherein it was held as follows : If after taking into consideration the duty payable in respect of all the goods and the duty paid in pursuance of the final assessment order, if still the assesse is due in any duty, then for the short fall in payment of duty, the assessee is liable to pay interest. The aforesaid decision of the Hon ble High Court has been followed in following decisions : a. Jonas wood head Sons v. CCE [2015-TIOL-1848-CESTAT-Mad] b. Hindustan Zinc v. CCE [2015-TIOL-2427-CESTAT-Del] c. Jyothy Lab v. CCE [Final Order No.40918-40919/2015 dated 27.07.2015] 7.2 What emerges from the above discussions is that the manner of invoicing / pricing of DTS items done by the appellants is very much in consonance with the office order dt. 22.12.2004. It is true that the lower authorities are harbouring a view that the Estimated Average Value of Goods per kg to be supplied (EVAGS per kg) suggested to be taken for the purpose of arriving at the value of goods supplied as per para 15 of 2004 guidelines, may not be appropriat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o site cannot be easily verified at the time of finalization The said Office Order also considered the possibility of adopting alternative method and it was concluded that the method being followed attributes higher revenue in most of the cases than under a method where cost of DTS items has reckoned 115% of the price paid to DTS vendors. 7.4 Viewed in this light, once the appellants have not been found in breach of Guidelines contained in the Office Order dt. 22.12.2004 the finalization of provisional assessment indeed will naturally be treated to have done only following the said Order. It is also to be noted that certain verifications regarding the value and weight of DTS items and the items supplied by assessee s units for all items covered by commercial invoices are required to be done periodically, to ensure that at the time of finalization of assessment there will not be any need to check even figures with respect to any documents other than the commercial invoice. 9. From the above, we do not find any change in the facts or the circumstances and that all the objections/contentions urged before us by the Ld. Joint commissioner stand answered, that is to say, this Bench has c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emorandum were that the assessee should furnish all details/documents, which have not been done, therefore, the interference by the First Appellate Authority was required. 10.4. This is also something which we cannot accept now because, the original authority has mentioned the documents placed before him which were duly verified by him and he being the first/Adjudicating Authority who was seized of the matter, has applied his mind to all such documents and on being satisfied, has finalised the provisional assessments after following the instructions/guidelines in the Office Memorandum. It would have been a different scenario altogether had the Adjudicating Authority himself expressed un-satisfaction, which is not the case. Hence, the view of the First Appellate Authority is a mere change of opinion and, as long as the view expressed by the Adjudicating Authority after following the guidelines in the Office Memorandum is not found to have resulted in revenue loss, setting aside the finalised assessments on account of change of opinion is clearly impermissible in law and hence, unsustainable. 11. Resultantly, we set aside the impugned order and allow the appeals with consequential be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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