RNB Carbides & Ferro Alloys Private Limited Vs Commissioner of Central Excise (CESTAT Kolkata)
Current appeal has been filed against Order-in-Appeal No.29/SH/CE(A)/GHY/09 dated December 18, 2009 (OIA), wherein the revenue after scrutinizing the M/s. RNB Carbides & Ferro Alloys Private Limited (Appellants) accounts book held that the Appellants had overvalued its products by including freight charges and issued the Show Cause Notices (SCN) to recover the excess refund which were availed by the Appellants.
Larger Period of Limitation was invoked by the Revenue on the ground that the Appellant should not have included outward freight in the Assessable Value and there was misdeclaration of “Place of Removal” which led to over valuation of Assessable Value thereby claiming excess refund.
The Appellant relying on the case of Commissioner of Customs and Central Excise, Aurangabad – v. Roofit Industries Limited [2015 (319) ELT 221 (SC)] and Circular No. 59/1/2003-CX dated March 03, 2003 and Circular No. 988/12/2014-CX dated October 20, 2014 contended that the Place of Removal had to be determined by referring to the Place of Sale, which in the case was the buyer’s premises.
The Hon’ble CESTAT, Kolkata observed that the Appellants’ case fell within the purview of exception to Rule 5 and referred to Rule 7 read with Rule 11 of Central Excise (Valuation) Rules, 2000 (“the Valuation Rules”) which mentions that the Assessable Value would be the price charged along with the additional charges upto the place of sale including freight.
Noted that the transportation costs of the Appellant would be included by relying on Circulars (supra) put forth by the Appellants for the reason that the terms and conditions of the sale unambiguously stipulates that the act of sale would be completed upon on-door delivery which in the case of the Appellant was the buyer’s premises.
Further placed reliance on the case of Topcem India vs. UOI [2021 (376) ELT 573] and held that the refund already sanctioned cannot be termed as “erroneous refund” more so view of the fact that refund has been duly sanctioned by the Department as per the laws prevailing then duly supported by the Central Board of Excise and Customs (“CBEC”) clarifications at relevant point of time.
FULL TEXT OF THE KOLKATA CESTAT JUDGEMENT
1. The present appeals involving identical questions of law are taken up together for disposal for the sake of convenience, out of which, four appeals have been filed by the assessees, namely, (i) M/s RNB Carbides & Ferro Alloys Pvt. Ltd., (ii) Nezone Alloys Ltd & (iii) Meghalaya Carbide & Chemicals Pvt. Ltd., while the remaining eight appeals have been filed by the Revenue. Out of the total eight appeals filed by the Revenue, the eight appeals being Ex.Appeal Nos.E/700/2011, E/776-779/2011 & E/75148-75150/2015, are filed for withdrawal as prayed by the Revenue in terms of litigation policy vide Board’s instruction being F.No.390/Misc./116/2017-JC dated 22.08.2019
2. Accordingly, the prayer for withdrawal of the appeals by the Revenue, is granted and the Ex.Appeal Nos.E/700/2011, E/776-779/2011 & E/7514875150/2015, are dismissed as withdrawn under National Litigation Policy. Cross Objection No.124/2011 in Excise Appeal No.779 of 2011 also gets disposed off.
3. Now, we take up the four appeals filed by the assesses for final disposal.
4. Briefly stated, the facts of the case are that the assessees were engaged in the manufacture and sale of Ferro Alloys, Ferro Silicon and Ferro Slag classifiable under Chapter 72 of the Central Excise Tariff Act, 1985. The assessee’s units were located within the State of Meghalaya and enjoyed the benefit of Central Excise duty exemption under Notification No. 32/99-CE dated 08.07.1999, as amended. The said notification operated by way of refund, where under the assessee first paid the Central Excise duty leviable on the clearances of its final products and, thereafter, received refund of the amount of duty paid from its account current.
5. The dispute before us pertains to the refunds obtained by the assessee from time to time in terms of the aforesaid exemption notification. The assesee had self-assessed the duty on clearances, paid the same and then filed the refund claims for amounts paid from its account current. The said refund claims were processed and the refunds were granted. Subsequent to such grant of periodical refunds, the assessee’s Books of Accounts were scrutinized. The Revenue objected to the inclusion of freight charges in the assessable value of goods. It was the revenue’s case that the assessee had overvalued its products by including freight charges which ought not to have been included under Section 4(1) of the Central Excise Act, 1944 read with Rule 5 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. Several Show Cause Notices were issued against the assessees for recovering the alleged excess refunds, details whereof are as under:
