Cce, Ludhiana vs M/S.Happy Steel Pvt. Ltd

[Arising out of Order-in-Appeal No.121 & 122/CE/CHD/2006 dated 22.02.2006 (C No.345-346/CE/APPL/LDH/2005 dated passed by the Joint Commissioner (Appeals), Central Excise Commissionerate, Chandigarh]

Excise Appeal No.E/1717/2006-EX[DB]

[Arising out of Order-in-Appeal No.121 & 122/CE/CHD/2006 dated 22.02.2006 (C No.345-346/CE/APPL/LDH/2005 dated passed by the Joint Commissioner (Appeals), Central Excise Commissionerate, Chandigarh]

For approval and signature:

HONBLE MR. RAKESH KUMAR, MEMBER (TECHNICAL)

HONBLE MR. 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?

__________________________________________________

CCE, Ludhiana Appellant

Vs.

M/s.Happy Steel Pvt. Ltd.  Respondent

Present for the Appellant : Shri.Ranjan Khanna, D.R.

Present for the Respondent: Shri.Kamal Jeet Singh, Advocate

Coram:HONBLE MR. RAKESH KUMAR, MEMBER (TECHNICAL)

HONBLE MR.S.K. MOHANTY, MEMBER (JUDICIAL)

Date of Hearing/Decision: 17/04/2015

FINALORDER NO. 51410-51411/2015

PER: RAKESH KUMAR

Appeal No.E/1716/2006 filed by the Revenue was decided alongwith other appeals filed by the Revenue where M/s.Nahata Fabrics Ltd., Nahata Investments Pvt. Ltd., M/s., Ummed Textile Mill, M/s.Vinod Industry and M/s.Kalawati Fabrics are the respondents, vide Final Order No.58544-58562/2013-SM(BR) dated 09.12.2013 by which all the appeal filed by the Revenue including the present appeal were dismissed. However subsequently the Commissioner, Central Excise, Ludhiana filed an ROM application No.51432/2014 in respect of this appeal on the ground that this appeal filed by the Revenue where M/s. Happy Steel Pvt. Ltd. (Unit II) is the respondent, was wrongly tagged with the other appeals No.E/597-615/2006 as the issue involved in this case regarding valuation of the goods cleared to another unit of the same appellant company whether it is to be determined under Rule 8 of the Central Excise Valuation Rules or otherwise, is totally different from the issue involved in the appeals No.E/597-615/2006 where issue involved related to deemed credit.

2. We have heard both the sides in respect of the ROM application.

3. On going through the records, we find that the Commissioners plea is absolutely correct. The appeal No.E/1716/2006 filed by the Revenue where M/s.Happy Steel Pvt. Ltd. is the respondent has absolutely no connection with the appeal No.E/597-615/2006 also filed by the Revenue. In view of this, Tribunals final order dated 09.12.2013 in so far as it relates to Appeal No.E/1716/2006 is recalled and this appeal is to be re-heard alongwith another appeal  E/1717/2006 also filed by the Revenue, against the same order. The ROM application filed by the Commissioner is allowed and Revenues appeal No.E/1717/2006-EX is restored.

4. Heard both the sides in respect of the main appeal.

5. The respondents are manufacturers of steel forgings chargeable to Central Excise duty. They have two units. The dispute is in respect of Unit II, at Village Jaspal Bangar, Kanganwal Road, Ludhiana. The period of dispute in this appeal is from 01.01.2004 to 30th September, 2004. During this period the respondent Unit i.e. Unit-II of the respondent company, was clearing the rough forgings to Unit-I located in the same Village but at a different address. These clearances were being made on payment of duty on the value at which the forgings were being cleared to independent buyers. The Department was of the view that in respect of these forgings the duty should have been paid on the value determined under Rule 8 of the Central Excise Valuation Rules i.e. on the basis of 110% of the cost of production. It is on this basis that the duty demand of Rs.11,50,747/- and 3,23,863/- for the period from 01.01.2004 to 30th September, 2004 were confirmed alongwith interest under section 11AB against the respondent by 2 separate orders passed by the Joint Commissioner/ Dy. Commissioner. The Original adjudicating also imposed penalties of same amount on them. On appeals being filed to Commissioner (Appeals) against the orders of the Original Adjudicating Authority, the Commissioner (Appeals) by a common order-in-appeal set aside the orders of the Original Adjudicating Authority holding that when the respondent during the same period were having sales to independent buyers and were also clearing part of the goods to their other unit for its captive use, in respect of clearances to the other unit for its captive use, assessable value would be the price at which the goods were being sold to independent buyers. Against this order of the Commissioner (Appeals), these appeals have been filed by the Revenue.

6. Shri Ranjan Khanna, the ld. D.R. assailed the impugned order by reiterating the grounds of appeal in the Revenues appeal and pleaded that while the Commissioner (Appeals) has relied upon the Tribunals judgment in the case of Steel Complex Ltd vs. CCE, Calicut reported in 2004 (171) ELT 255, this judgment of the Tribunal was challenged by the Department before the Apex Court and the Revenues Appeal has been admitted by the Apex Court and is still pending. He, therefore, also pleaded that fact that the same goods have been sold to other independent buyers is not relevant for determining the value of the goods in respect of the clearances to the respondents other unit for its captive consumption, in respect of which the value has to be determined under Rule 8 of the Central Excise Valuation Rules. Besides this, he also cited another judgment of the Tribunal in the case of BOC India Ltd. vs. CCE, Jamshedpur reported in 2004 (168) ELT 478 (Tri. Kolkata) wherein the Tribunal held that since transfer of goods by an assessee to its sister unit cannot be considered as sale, the valuation of such transfers has to be determined on the basis of 115%/110% of the cost of production in terms of Rule 8 of the Central Excise Valuation Rules and in this regard the Tribunal relied upon the CBEC Circular No.643/34/2002-CX dated 01.07.2002. Shri Khanna, therefore, pleaded that the impugned order is not correct.

7. Shri Kamaljeet Singh, Advocate, the learned Counsel for the respondent, pleaded that the issue involved in this case stands decided in favour of respondent by Larger Bench judgment of the Tribunal in the case of Ispat Industries Ltd. vs.Commissioenr of C. Ex., Raigad reported in 2007 (209) ELT 185 (Tri. LB) wherein the Larger Bench has held that when an assessee besides selling the goods manufactured by him to independent buyers also cleared the goods for captive consumption to itself or to another unit of the same assessee for its captive use, the value of the goods cleared from captive consumption would be determined on the basis of price at which the same goods was being sold to an independent buyers and not on the basis of Rule 8 of the Central Excise Valuation Rules. He also mentioned that Larger Bench decision of the Tribunal in the case of Ispat Industries Ltd. (Supra) had considered the earlier judgments of this Tribunal in the case of Steel Complex Ltd. (supra) and BOC India Ltd. (supra). He, therefore, pleaded that there is no infirmity in the impugned order.

8. We have considered the submissions from both the sides and perused the records. Since the issue involved in this case stands decided in the respondents favour by Larger Bench judgment of the Tribunal in the case of Ispat Industries Ltd. (supra) and in that judgment the other judgment of the Tribunal in the cases of BOC India Ltd. (supra) and Steel Complex Ltd. (Supra) have also been considered, it is the Larger Bench judgment of the Tribunal which would be binding on this Bench. Hence, we do not find any infirmity in the impugned order. The Revenues appeals are dismissed.

[Dictated & Pronounced in the open Court].

(S.K.MOHANTY) (RAKESH KUMAR)

MEMBER (JUDICIAL) MEMBER (TECHNICAL)

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