Commissioner of Central Excise Bolpur Commissionerate Vs Steel Authority of India Limited (Calcutta High Court)
Calcutta High Court considered an appeal filed by the revenue against a composite order dated 15 September 2023 passed by the Customs, Excise and Service Tax Appellate Tribunal. The Tribunal had held that no interest was payable on a confirmed central excise duty demand due to revenue neutrality, while simultaneously rejecting the assessee’s refund claim.
The respondent assessee is a manufacturer of excisable iron and steel products under Chapters 72, 73 and 86 of the Central Excise Tariff Act, 1985. During the relevant period, it cleared billets, rods and HT bars to job workers and conversion units on stock transfer basis after paying excise duty. The dispute arose over valuation of goods sent to job workers where no sale was involved, requiring application of the Central Excise Valuation Rules, 2000.
The department took the view that since the assessee also sold identical goods to independent buyers at the factory gate, Rule 8 of the Valuation Rules (captive consumption) was inapplicable. Instead, valuation should follow Rule 11 read with Section 4(1)(a), based on transaction value of comparable goods sold to independent buyers. A show cause notice dated 4 August 2005 proposed recovery of differential duty, interest under Section 11AB, and penalty.
