Agarwal Cables vs Cce, Allahabad
- CitationAppeal No.E/3235/2005-EX
Ratio decidendi
The rule this decision rests on
Where a manufacturer, having crossed the small-scale exemption limit in a financial year, has paid central excise duty at the higher rate and has contracted to receive reimbursement of duty only at a lower rate, the abatement of duty for arriving at the assessable value of goods sold on a cum-duty price basis is to be made by deducting the duty actually payable on those clearances, not the duty actually reimbursed under the contract. The point is concluded in the assessee's favour by the Tribunal's earlier decision in the same assessee's own case (1998 (104) ELT 352), which decided an identical issue, and that view was followed in two subsequent final orders in the assessee's own cases; the Tribunal therefore holds the duty demand and penalty unsustainable on the strength of those decisions.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
(Arising out of OIA No.71-CE/Alld/2005 dt.29.6.05 passed by the CCE (Appeals), Allahabad)
Date of Hearing/Decision: 23.03.2015
For approval and signature:
HonbleMr.Rakesh Kumar, Member (Technical)
HonbleMr.S.K.Mohanty, Member (Judicial)
1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3 Whether Their Lordships wish to see the fair copy of the Order?
4 Whether Order is to be circulated to the Departmental authorities?
Agarwal Cables Appellant
Vs
.
CCE, Allahabad Respondent
Present for the Appellant: Shri Mayank Garg, Advocate
Present for the Respondent: Shri R.k.Grover, AR
Coram: HonbleMr.Rakesh Kumar, Member (Technical)
HonbleMr.S.K.Mohanty, Member (Judicial)
FINAL ORDER NO.51199/2015
PER: RAKESH KUMAR
The facts leading to the filing these appeals are, in brief, as under:
1.1 The appellant are manufacturer of ACSR conductors and AAAC Weasel conductors chargeable to central excise duty. The period of dispute is from 2001-03 to 2002-03. During this period, the appellant were availing SSI exemption No.9/01-CE dt.1.3.2001 Under which the appellant were liable to pay duty @ 9.6% upto Rs.one crore during the financial year with the cenvat credit facility and in respect of clearance beyond Rs.one crore they were liable to pay duty @16% with the input credit facility. The appellant during this period entered into a contract with UP Power Corporation Ltd. (UPCL), and according to the contract, the excise duty in respect of all the supplies was to be reimbursed @ 9.6% only. The appellant in respect of the clearance upto Rs.one crore during financial year 2001-02 and 2002-03 paid duty @ 9.6% and received excise reimbursement from the UP Power Corporation at this rate. However, in respect of clearances during these financial years beyond Rs.one crore, while the appellant paid duty @ 16%, they received excise reimbursement @ 9.6% only. The dispute is in respect of assessable value of clearance beyond Rs.one crore during the financial year 2001-02 and 2002-03. In respect of the clearance beyond Rs.one crore during financial year 2001-02 and 2002-03 the appellant treated the total cum duty price received by them from their customer (UPCL) as including duty @ 16% and on this basis they abated the element of duty. For example, if the basic price of conductor supplied was Rs.100/- and the total price realized from UPCL was Rs.109.6/-, they, instead of taking assessable value as Rs.100/-, they took the assessable value as (109.6 x 100) w 116.
The department, however, was of the view that in respect of clearances beyond Rs.one crore, the duty should have been abated at the rate of 9.6% only i.e. at the rate at which the reimbursement was received. It is on this, that the Deputy Commissioner vide Order-in-Original dt.3.3.2005 Confirmed the duty demand of Rs.3,34,145/- against the appellant alongwith interest on it under section 11AB and imposed penalty of equivalent amount on them under section 11AC. On appeal to the Commissioner, the Commissioner (Appeals) vide Order-in-Appeal, confirmed the order of the Deputy Commissioner.
2. Heard both sides.
3. Shri Mayank Garg, Advocate, learned counsel for the appellant, pleaded that the dispute in this case is only in respect of assessable value of clearance after crossing the exemption limit of Rs.one crore during financial years 2001-02 and 2002-03, that in respect of clearance beyond Rs.one crore, though the appellant, in terms of their contract with UPCL, received duty reimbursement @9.6% only, they had paid the duty @ 16% adv. and therefore abatement of duty should be @ 16% adv, by treating the price realized as cum duty price, that in this regard, he relies upon apex court judgement in the case of CCE vs. Maruti Udyog Ltd.-2005 (179)ELT A102(SC) and CCE vs. Srichakra Tyres Ltd.- 2002 (142) ELT A279 (SC), that in the appellants own case for the previous period, the Tribunal in its judgement reported in 1998 (104) ELT 352 has held that while determining the assessable value, whatever duty was actually payable has to be deducted and since the actual duty payable for the clearances beyond the value of Rs. 75 lakhs was 30%, such duty has to be deducted in arriving at the assessable value, that same view has been taken by the Tribunal in the appellants earlier case in respect of Appeal No..E/4772/91-A decided vide Final Order No.780-782/98-A dt. 21.5.98 and in another order in the appellants case in respect of Appeal no/E/1582-1585/92-A decided vide final order No.983-996/98-A dt.17.7.98, and that in view of this, the impugned order, is not sustainable.
4. Shri R.K.Grover, ld.DR defended the impugned order by reiterating the findings of the Commissioner (Appeals) and relying on the decision of the Tribunal in the case of Sagar Spun Pipes Vs.CCE, Aurangabad reported in 2014 (305) ELT 179 wherein it was held that when the assesse even after crossing limit of SSI exemption, had not paid duty or had paid duty at the lower rate, price realized by them cannot be treated as cum duty price and the benefit of cum duty price cannot be given to them. He also emphasized that even if according to the exemption notification, after crossing the limit of Rs.one crore in any financial year, duty was payable @ 16/% it is the duty which was actually realized from the customers which should be excluded from the assessable value .
5. We have considered the submissions from both the sides and perused the records.
6. We find that the issue involved in this case stands decided in the appellants favour by the earlier judgement of the Tribunal in the appellants own case reported in 1998 (104) ELT 352 wherein an identical issue was involved and the Tribunal held that though in respect of clearance beyond Rs.75 lakh in a financial year, the appellant were liable to pay duty at the rate of 30% adv., while their duty reimbursement from UPCL was restricted to only 20%., the duty which is actually payable has to be deducted in arriving at the assessable value. This decision has been followed in two more final orders in the appellants own case, involving identical issue No.780-782/98-A dt. 21.5.98 and No.983-996/98-A dt.17.7.98. Following the above orders of the Tribunal, we hold that the impugned order is not sustainable. The same is set aside. The appeal is allowed.
(Pronounced in the open court)
(S.K.MOHANTY) (RAKESH KUMAR)
MEMBER (JUDICIAL) MEMBER (TECHNICAL)
mk
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