SAIL, Alloy Steel Plant Vs Commissioner of Central Excise (CESTAT Kolkata)
CESTAT Kolkata held that demand of excise duty in terms of rule 8 of the Valuation Rules not sustainable as correct higher duty already paid in terms of rule 4 of the Valuation Rules.
Facts- The Appellant is a Public Sector Undertaking under the Ministry of Steel, Government of India and is engaged in the activity of manufacturing excisable goods falling under chapters 72, 73 and 86 of the Central Excise Tariff Act. During the relevant period, the Appellant supplied billets, rounds, HT Bars, blooms, etc., to its independent customers as well as cleared the same to its job workers for job work. The clearances made to the Appellant’s job-workers were made upon payment of excise duty on the value determined as per Rule 4 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 (the Valuation Rules), viz. independent sale price of such goods. However, the department alleged that Rule 8 of the Valuation Rules was applicable on such clearances, and the Appellant was liable to pay the differential excise duty in terms of Rule 8 of the Valuation Rules.
The show cause notices were adjudicated and proposed demands were confirmed. In terms of OIO, the appellant was held liable for payment of excise duty along with interest and penalty. Being aggrieved, assessee has preferred the present appeal.
Conclusion- Held that demand raised vide the impugned order is not sustainable as during the relevant period the Appellant had paid the correct duty arrived at in terms of Rule 4 of the Valuation Rules. Moreover, the Appellant has paid much higher duty than what is demanded in the impugned order and such factual circumstances, adjustment of excise duty must have been allowed instead of raising any further demand.
FULL TEXT OF THE CESTAT KOLKATA ORDER
The Appellant is a Public Sector Undertaking under the Ministry of Steel, Government of India and is engaged in the activity of manufacturing excisable goods falling under chapter 72, 73 and 86 of the Central Excise Tariff Act. During the relevant period, the Appellant supplied billets, rounds, HT Bars, blooms, etc., to its independent customers as well as cleared the same to its job workers for job-work. The clearances made to the Appellant’s job-workers were made upon payment of excise duty on value determined as per Rule 4 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 (hereinafter referred to as ‘the Valuation Rules’), viz. independent sale price of such goods. However, the department vide the following two Show Cause Notices alleged that Rule 8 of Valuation Rules was applicable on such clearances, and the Appellant was liable to pay the differential excise duty in terms of Rule 8 of the Valuation Rules, as demanded:
