Commissioner of Central Excise And Service Tax Vs S C Johnson Products Private Limited (Guwahati High Court)
The Guwahati High Court delivered a judgment on two appeals filed by the Commissioner of Central Excise and Service Tax against the common order of the CESTAT, Kolkata, concerning Excise Appeal Nos. 71476/2013 and 71477/2013. The appeals pertained to the determination of whether S.C. Johnson Products Private Limited, a manufacturer of mosquito repellents and cleaning preparations with units in Bamunimaidam Industrial Area, Guwahati, was eligible for a special rate of value addition under the Area-Based Exemption Notifications (Notification Nos. 32/99-CE, 17/2008-CE, and 31/2008-CE) for the financial year 2010-2011.
The CESTAT had allowed the respondent’s appeals, holding that the methodology used by the company to calculate sale value from audited financial statements and apportion it to respective units based on stock transfer ratios was correct and consistent with the Exemption Notifications. The Commissioner had earlier rejected the respondent’s application, arguing that the actual value addition could not be determined without unit-wise sale data, and therefore the conditions for fixation of the special rate of value addition were not fulfilled.
The Commissioner raised three substantial questions of law: whether the CESTAT erred in accepting the apportionment method without actual unit-wise sale data, whether the issue was no longer res-integra due to precedent in Hindustan Unilever Ltd. vs. Commissioner of Central Excise & Service Tax, and whether the methodology used by the respondent for calculating sale value was legally acceptable. The respondent argued that separate applications had indeed been submitted for the two units, and the appeals were not maintainable under Section 35G of the Central Excise Act, 1944, since the matter concerned the valuation of goods and quantum of exemption, which fell within the exclusive jurisdiction of the Supreme Court under Section 35L.
