Case Law Details
Hindalco Industries Limited Vs Commissioner of Central Excise (CESTAT Kolkata)
CESTAT Kolkata held that demanding duty on the short payment, ignoring the excess payment is bad in law. Accordingly, demand of differential duty unsustainable as the entire exercise is revenue neutral.
Facts- During the period April 2009 to March 2010, the Hirakud Unit cleared aluminium ingots and coils to the said sister units upon payment of excise duty, on the basis of 110% of the estimated cost of production (as per the previous year’s CAS-4 statements adjusted for inflation and forecast of price increase in the current year). At the end of the year, when the final cost of production was worked out for the FY 2009-10, it emerged that the Appellant had on an overall basis, paid excise duty on the value which is much more than 110% of the cost of production. Thus, the Appellant was of the view that they were not liable to pay any differential liability.
However, the department noticed that if the final CAS-4 figure is applied for every month of the year 2009-10, there would be short payment of duty
Notably, for the remaining months of the year, since the duty payment was in excess vis-à-vis the value as per the final CAS-4 figure, the same was ignored by the Department. Thus, for the specific months where the payment was short, the department alleged that Appellant had not determined assessable value of the cleared goods as per Rule 8 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 (hereinafter referred to as ‘Valuation Rules’) read with Section 4(1)(b) of the Central Excise Act, 1944. It was also alleged that the Appellant resorted to suppression, wilful misstatement of material, facts and contravention of various provisions of the Central Excise Act and Rules made thereunder with the intent to evade payment of Central Excise duty.
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