2019 (3) TMI 26 – CESTAT CHENNAI – TMI – Valuation – part of final goods cleared to sister unis – related party transaction or not – Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules 2000 – Held that:- In the first instance, the appellants have been taking a stand that they are not governed by CAS-4 standards and are not required to produce CAS-4 certificates. On the other hand, we are also unable to fathom the method and manner of working of the differential duty liability adopted by department. If they were not satisfied with appellant’s method of cost construction they should have themselves appointed a Cost Accountant as permitted in Central Excise law to ascertain the cost of production and worked out the assessable value as 115% / 110% of such cost, as the case may be, to demand any duty liability. Instead, a very discernible shortcut, not supported by any provision of law, was adopted, namely, adding 15% to their invoice prices.
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. 40374/2019 – Dated:- 21-2-2019 – Ms. Sulekha Beevi, C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical) Shri K.S. Jain, Managing Director For the Appellant Shri S. Govindarajan, AC (AR) For the Respondent ORDER Per Bench The facts of the case are that the appellants are manufacturers of Diesel Generating sets. Pursuant to audit, it appeared to the department that while appellants were clearing their final products, they also cleared such excisable goods manufactured by them to their sister units, where the goods were consumed in the manufacture of final products. It also appeared that in respect of such goods cleared by them, they had not determined the value in terms of Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules 2000 [hereinafter referred to as the Rules 2000) and worked out the value at 115% of cost of production for the period upto 04.08.2003 and from 05.08.2003 onwards at 110% of cost of production. CAS-4 certifi
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ellants are in appeal before this forum. 2. Today when the matter came up for hearing, on behalf of the appellant Shri K.S. Jain, their Managing Director submitted that the issue is revenue-neutral since whatever the duty was paid by the appellant would have been taken as credit by their other unit. He also submits that demand is time-barred for the reason that the issue was under correspondence between the jurisdictional Range Officer and the appellants from 08.03.2004 and they had time and again clarified that they are not required to produce the CA-4 certificate. 3. On the other hand, Ld.A.R Shri S. Govindarajan submits that for all clearances to their sister unit appellants were required to clear the goods at 115% / 110% of the cost of production as per CAS-4 standards which is certified by the Cost Accountant. In spite of repeated reminders, appellants failed to produce necessary proof that the assessable value has been adopted on the basis of such CAS-4 nor have they produced a c
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e contention of the appellants that this issue in any case is revenue-neutral. That averment is supported by a slew of case laws / decisions of higher appellate forum. This very Bench in the case of Anglo French Textiles Vs CCE Puducherry 2018 (360) ELT 1016 (Tri.-Chennai) has held as under : 5. On considering the fact that the goods are cleared to the sister unit and also the fact that the appellant is eligible for credit on the duty paid, the entire exercise is a revenue neutral situation as contended by the Learned Counsel for the appellant. This being the case, even if the appellant is directed to pay duty, other sister unit would be eligible for the credit. In the case of Jay Yuhshin Ltd. (supra), in a similar situation, the Larger Bench of the Tribunal has held that when there is revenue neutrality, the demand of duty is unsustainable. 6. We find that it is a fit case to set aside the demand on the basis of revenue neutrality which we hereby do. The impugned order is set aside an
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