M/s Lloyd Insulation (I) Ltd. Versus CGST & CE, Ujjain
Central Excise
2019 (1) TMI 899 – CESTAT NEW DELHI – TMI
CESTAT NEW DELHI – AT
Dated:- 7-8-2018
Appeal No. E/51477/2018-DB – Final Order No. 53489/2018
Central Excise
Mr. Anil Choudhary, Member (Judicial) And Mr. Bijay Kumar, Member (Technical)
Shri Pachanadhan, Advocate, Shri C.L. Dangi, Advocate – for the appellant
Ms. Tamana Alam, D.R. – for the respondent
ORDER
Per Bijay Kumar:
Being aggrieved with the impugned order, the Order-in-Appeal No. IND-EXCUS-000-APP-611-17-18 dated 15.2.2018, the appellant has filed the present appeal. In the impugned order the ld. Commissioner (Appeals) has modified the order passed by the original adjudicating authority to the extent that penalty imposed was reduced to 50% under the provisions of Section 11AC(1)(c) of the Central Excise Act, 1994 (hereinafter referred to as 'Act') with effect from 18.4.2011.
2. Briefly stated, the facts of the case are that the appell
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Appeals) has passed the order modifying the order passed by the primary adjudicating authority.
3. Ld. Advocate on behalf of the appellant submits that the ld. Commissioner (Appeals) has erred while passing the impugned order on the ground that he has not followed the departmental instruction while confirming the demand. The departmental instructions are binding on the departmental authority, for which reliance was placed on CCE Vs. Dhiren Chemicals – 2002 (139) ELT 3 (SC). The department vide circular clarified the issue regarding inclusion of freight charge.
4. It was also submitted by the ld. Advocate that the appellant were selling their products in following ways:
(a) The finished goods are directly sent to customers and transportation charges incurred are borne by the customers themselves. In such case the transportation charges are shown separately in the invoice and the place of removal of the goods were factory gate and, therefore, no Central Excise duty on the transportati
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e. However, audit proposed in such cases that the transportation charges should be added in the assessable value and duty should accordingly be discharged which are not in accordance with Rule 5 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000.
(c) In some of the cases in absence of order from customers the goods were sent to the depot for further sales. In such cases care was taken that the price of the goods remained the same or higher than the price which were for the goods sold at the factory gate. It is the version of the department that the appellant had contravened the provisions of Rule 5 and Rule 7 of Central Excise Valuation Rule, 2000 read with Section 4 of the Act. Inasmuch as the appellant while selling their goods through depot, have shown the freight amount separately and recovered the same from the depot but failed to include the same for the purpose of discharge of Central Excise duty. The period involved is 2011-2012 to 2014-2015 fo
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ppellant in respect of the goods sold at factory gate did not confirm the provisions of Rule 5 of Central Excise Valuation Rules, 2000 and relied upon the following case law :
(i) CCE Vs. Prakash Cables – 2013 (295) ELT 745;
(ii) Kunal Enterprises Vs. CCE – 2013 (294) ELT 613;
(iii) CCE Vs. PRS Rolling Mills Pvt. Ltd. – 2012 (281) ELT 560;
(iv) CCE Vs. Star Oxochem Pvt. Ltd. – 2013 (289) ELT 165.
(e) Further, the reliance was placed on the CBEC Circular No. 988/12/2014-CX. dated 20.10.2014 (supra) wherein para 5 it is clarified as under :
“It may be noted that there are very well laid rules regarding the time when property in goods is transferred from the buyer to the seller in the Sale of Goods Act, 1930 which has been referred at paragraph 17 of the Associated Strips case reproduced below for ease of reference:
“17. Now we are to consider the facts of the present case as to find out when did the transfer of possession of the goods to the buyer occur or when did the property
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that description and in a deliverable state are unconditionally appropriated to the contract, either by the seller with the assent of the buyer or by the buyer with the assent of the seller, the property in the goods thereupon passes to the buyer. Such assent may be expressed or implied and may be given either before or after the appropriation is made. Sub-section (2) of Section 23 further provides that where, in pursuance of the contract, the seller delivers the goods to the buyer or to a carrier or other bailee (whether named by the buyer or not) for the purposes of transmission to the buyer, and does not reserve the right of disposal, he is deemed to have unconditionally appropriated the goods to the contract.”
(f) It was also contested by the ld. Commissioner finding 'that the contention of the appellant regarding confirmation of duty of Rs. 1,44,998/-, I find that the appellant have not put forth the copy of purchase order and invoices elaboration the facts that how the goods ar
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the reliance was placed on the judgement delivered by Hon'ble Supreme Court in case of M/s Pragati Concrete Products (P) Ltd. Vs. CCE – 2005 (183) ELT 487 (Tri.-Bang.). The decision of the Tribunal was challenged by the department before the Supreme Court and Hon'ble Supreme Court dismiss the departmental appeal as reported 2015 (322) ELT 819 (SC). It was also submitted that in the case of Arviva Industries (I) Ltd. Vs. CCE – 2005 (179) ELT 506 (Tri.-Mum.) that if the records of the appellant have been audited periodically and no objection has been raised by the audit officer regarding the method of valuation adopted, subsequently suppression of fact cannot be alleged. As regular audits of the unit were being conducted in terms of guideline fixed by the CBEC the extended period is not applicable in this case.
5. The ld. AR on behalf of the Revenue, supports the impugned order and submits that the Commissioner (Appeals) has given detailed order regarding the inclusion of freight amoun
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ailable and freight is borned separately by the customer in view of the decision cited supra, the same is not includible in the assessable value. It is also on record that the demand has been raised as per the audit objection and the entire activity of appellant was known to the department. Based on the decision in following cases, we find that; M/s Pragati Concrete Products (P) Ltd. (supra) and Arviva Industries (I) Ltd. (supra), the extended period invocable in this case. The same view has also expressed in the cases of CCE Vs. Tigrania Metal & Steel Industries – 2001 (132) ELT 103 (Tri.-Del.), Collector of C. Ex. Vs. Cadila Laboratories P Ltd. – 2000 (124) ELT 411 (Tribunal), Sunshine Tube (Pvt.) Ltd. Vs. CCE – 2001 (136) ELT 231 (Tri.-Bang.) and Jaishri Engineering Co. (Pvt.) Ltd. Vs. Collector of C. Ex. – 1989 (39) ELT 449 (Tri.). We are, therefore, of the considered opinion that in this case the entire demand is also time barred as the extended period is not available to the depa
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