Cce, Indore vs M/S Ruchi Strips And Alloys Limited

Excise Appeal No. 2218 of 2006 with Cross Objection Application No. 225 of 2006 and

Excise Appeal No. 2219 of 2006

[Arising out of the Order-in-Appeal No. IND-I/129-130/2006 dated 28/03/2006 passed by The Commissioner (Appeals-I), Customs & Central Excise, Indore.]

For Approval and signature :

Honble Shri Ashok Jindal, Member (Judicial)

Honble Shri B. Ravichandran, Member (Technical)

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 would 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 :

Department Authorities?

CCE, Indore Appellant

Versus

M/s Ruchi Strips and Alloys Limited Respondent

Appearance

Shri Govind Dixit, Authorized Representative (DR)  for the appellant.

Shri R.C. Chaure, Advocate  for the Respondent.

CORAM: Honble Shri Ashok Jindal, Member (Judicial)

Honble Shri B. Ravichandran, Member (Technical)

Final Order No. 52971-52972/2015 Dated : 18/09/2015

Per. B. Ravichandran :-

These two appeals filed by Revenue are taken up for decision together as the issue involved is same. The respondents are engaged in the manufacturer of cold rolled sheets/coils/strips chargeable to Central Excise duty. Proceedings were initiated against the respondent on the issue of valuation of goods manufactured on job work basis. The Original Authority in his order concluded that the respondent should have included the freight incurred on inputs in the landed cost of material and assessable value of the final product should have been accordingly arrived at. He confirmed the demand and imposed penalties on both the respondents. On appeal, the Commissioner (Appeals) set aside the order on the question of time bar. Aggrieved by the said order, the Revenue is in appeal.

2. In the grounds of appeal, the Revenue contended that respondent did not include the transportation charges in the assessable value with intend to evade the payment of Central Excise duty with the full knowledge. The details of landed cost of raw material should include the freight which is in the knowledge of the respondent. Hence the order of the Commissioner (Appeals) is not legal and proper and is liable to be quashed. The respondents filed Cross Objection contesting the appeals. They have acted as per the documents supplied to them by the principal manufacturer (TISCO) and they have no means to know whether the freight is included or excluded in the invoice raised by the supplier. Such details are in the knowledge of the supplier and ultimately the proceedings were initiated after collecting the details from TISCO only. The respondents pleaded that TISCO informed them vide their letter dated 12/10/2001 regarding the non-inclusion of freight in the invoice value. It is not known to the respondent during the period of transaction and, hence, the question of suppression on the part of the respondent is not sustainable. They have relied on various case laws to submit that as job worker they are not involved in any valuation of goods and when the details are in the knowledge of the principal manufacturer suppression or fraud cannot alleged against the respondent. During the oral arguments, the learned AR reiterated the grounds of appeal and stated that the respondent cannot escape liability for non-inclusion of freight on inputs received from TISCO. He pleaded for restoration of original order by setting aside the impugned order. The learned Counsel for the respondents contended that there is no question of suppression of any fact by the respondent when the invoice is prepared by TISCO the inclusion or exclusion of freight is the decision and is in the knowledge of TISCO and as job worker they proceeded only with the documents supplied to them. It is an admitted fact that TISCO changed the accounting as admitted by their Finance Manager. These details were not available to the respondent during the material period. Hence, the question of suppression by the respondents is not tenable.

3. Heard both the sides and examined appeal records. The learned Commissioner (Appeals) examined the issue in detail in his impugned order. He observed that there were two Audits, in June 2000 and in August 2001 on the accounts of the respondent. In the second audit, the matter of non-inclusion of freight element was raised and thereafter the respondent paid the duty involved in January 2002. The respondent informed the Jurisdictional Superintendent vide their letter dated 10/03/2000 regarding clearance of excisable goods as per agreement with the TISCO and the assessable value of converted goods shall the aggregate of landed cost of raw material (inclusive of freight) and conversion charges which are inclusive of profit margin of the manufacturer. It is also seen that the freight element was included in all the invoices issued prior to 01/04/2000 and thereafter only the freight was not included. This was clear from the statement dated 30/01/2002 of the Accounts Manager of TISCO. It was also confirmed that no separate information was given regarding the freight to the respondents during the relevant time. The Accounts Manager of TISCO, the principal who supplied raw material stated that the freight is borne by them and the non-inclusion of the freight in the invoice value after 01/04/2000 is not informed separately to the respondent. Considering the factual position regarding the method of transaction between the respondent and the supplier, the documents covering such transaction, the deposition made by the supplier we find that no case for suppression of fact or mis-declaration can be made out against the respondent. We agree with the conclusion drawn by the learned Commissioner (Appeals) in his impugned order and find no reason to interfere with the same. Accordingly, the appeals filed by the Revenue are dismissed. The Cross Objection filed by the respondent is also disposed of.

(Operative part of the order pronounced in the open court.)

(Ashok Jindal)

Member (Judicial)

(B. Ravichandran)

Member (Technical)

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