Case Law Details
Nalwa Steel & Power Ltd Vs Commmisioner (CESTAT Delhi)
CESTAT Delhi held that once rule 10(b) of the Central Excise Valuation Rules, 1944 gets applicable, residual rule 11 of the Central Excise Valuation Rules, 1944 cannot be applied. Hence, demand confirmed under rule 11 is liable to be set aside.
Facts- The appellant is a manufacturer of TMT bars of various grades and it sold them to independent buyers as well as to two its inter-connected undertakings, namely, M/s Jindal Steel Power Ltd. and M/s Jindal Power Limited. It is undisputed that the appellant and these two entities are inter-connected undertakings and, therefore, they are related persons as per Section 4 of the Central Excise Act, 1944. M/s JSPL further sold the goods which it had bought from the appellant to independent customers. The appellant paid excise duty on such goods at prices at which JSPL sold the goods to such independent buyers. M/s JPL used the goods purchased from the appellant and the appellant paid service tax on such goods at 110% of the cost of manufacture based on the cost of production as per the CAS-4 certificate issued by the cost auditor.
The books and accounts of the appellant were audited by a special audit team of the Department and it was felt that the duty was short paid and, accordingly, a show cause notice was issued to the appellant which culminated in the Order-in-original passed by the Joint Commissioner of Central Excise, confirming the demand of duty as indicated above along with interest and imposing penalty of Rs.98,78,993/- u/s. 11AC.
Aggrieved, the appellant filed an appeal before the Commissioner (Appeals) who, by the impugned order, upheld the decision of the Joint Commissioner. Hence this appeal.
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