Commissioner Of Central Excise, ... vs M/S.Kesoram Rayon

Appeal No.Ex.Ap.534/07 (Arising out of Order-in-Original No.110-113/Commissioner/CE/Kol-IV/2007 dated 29.05.2007 passed by the Commissioner of Central Excise, Kolkata-IV.)

FOR APPROVAL AND SIGNATURE

HONBLE DR. D.M.MISRA, MEMBER(JUDICIAL) HONBLE DR.I.P.LAL, 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 should be released under Rule 27 of the CESTAT(Procedure) Rules, 1982 for publication in any Authorative report or not?

3. Whether Their Lordship wishes to see the fair copy of the Order?

4. Whether Order is to be circulated to the Departmental Authorities?

Commissioner of Central Excise, Kolkata-IV Applicant (s)/Appellant (s) Vs.

M/s.Kesoram Rayon Respondent (s)

Appearance:

Shri A.K.Biswas, Supdt.(A.R.) for the Appellant(s)

Dr.S.Chakraborty, Shri Arnab Chakraborty, Advocates for the Revenue

CORAM:

Honble Dr. D.M.Misra, Member(Judicial) Honble Dr.I.P.Lal, Member(Technical)

Date of Hearing :- 02.02.2015 Date of Pronouncement :- 02.02.2015

ORDER NO.A/75096/2015

Per Dr. D.M.Misra.

This Appeal is filed against Order-in-Original No.110-113/Commissioner/CE/Kol-IV/2007 dated 29.05.2007 passed by the Commissioner of Central Excise, Kolkata-IV.

2. Briefly stated the facts of the case are that the respondent are inter alia, engaged in the manufacture of Viscose Rayon Filament Yarn, falling under chapter sub-heading numbers 5403.32 of CEATA,1985. During the relevant period i.e. 01.07.2000 to 31.05.2004 & January 2005 to Jan.2006, they had manufactured & cleared the said goods from their factory to various depots resorting to provisional assessment, from where ultimately such goods were sold to the customers. It is alleged that on account of incorrect determination of assessable value under Section 4 of Central Excise Act, 1944 read with Rule 7 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, on finalization of provisional assessment, there was short payment of duty. Fourteen periodical show cause cum demand notices were issued to the respondent alleging short payment of a total duty of Rs.2,56,22,503/- during the said period from 01.07.2000 to 31.05.2004 & Jan. 2005 to Jan.2006. The Ld. Commissioner on adjudication dropped the demand notices and directed the jurisdictional adjudicating authority to finalise provisional assessment for the entire period on the basis of the observation recorded in the order. Aggrieved by the said order, the Revenue is in Appeal.

3. The Ld.A.R. for the Revenue has submitted that the Ld. Commissioner has failed to apply the provisions of Rule 7 of Central Excise Valuation Rules, 2000 inasmuch as while determining the nearest time of sale of good from the depots to the time of removal of goods from the factory to depots, he has accepted the selling price of the goods, after the date & time of removal of the goods under assessment from the factory to the depots. It is his submission that the nearest time of sale of goods from the depots for the purpose of Rule 7 of Central Excise Valuation Rules, 2000 should be prior to the date & time of removal/clearance of the goods from the factory to depots. Therefore, the order is bad in law.

4. Dr.Samir Chakraborty, Ld.Sr.Advocate assisted by Shri Arnab Chakraborty, Ld.Advocate for the respondent submitted that during the relevant period the respondent had cleared Viscose Rayon Filament Yarn to their depots spread over different parts of the country and paid the duty on clearance of such goods by determining the assessable value provisionally, following Rule 7 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. Later, the respondent has adopted the depots selling price nearest to the time of removal of the goods from the factory and paid the differential duty accordingly. He submits that the department has accepted the depot sale price as on the date of removal or before the date of removal from the factory to depots. However, demand notices were issued where the nearest time of sale was considered for determination of assessable value, after the date & time of removal of the goods under assessment from the factory to depots. The Ld. Advocate citing an example has submitted that while clearing the goods from factory to the depot, on 01.07.2002 if they have adopted the price at which such goods were sold from depot on 01.07.2002 or if there was no sale on that day, the sale price as on 30.06.2002, no objection had been raised, but if the sale price as on 05.07.2002 was adopted, as there was no sale nearest to that date, the sale price was rejected observing that it was after the date of removal of the goods from the factory. He submits that this issue has been settled by this Tribunal in the case of S.C.Enviro Agro India Pvt.Ltd. vs. CCE, Thane-II  2013 (298) ELT 257(Tri.-Mumbai).

5. We have carefully considered the submissions advanced by both sides. The only issue on which the Revenue is in Appeal, as is evident from their grounds of Appeal is that whether the nearest time, in terms of Rule 7 of Central Excise Valuation(Determination of Price of Excisable Goods) Rules, 2000, could be the time subsequent to the time & date of clearance/removal of the goods under assessment from the factory to depots. This issue has been considered by this Tribunal in S.C. Enviro Agro India Pvt. Ltd.s case, (supra) involving similar facts & circumstances. This Tribunal after analyzing the provisions of Section 4 of Central Excise Act, 1944 and Rule 7 of Central Excise Valuation Rules, 2000 observed as:

7. We find that the appellant cleared the goods from their factory during 23.04.2001 to 3.5.2001. There was no sale of the goods from the depot during this period. There was no sale of goods from the depot prior to 23.04.2001 also. The first sale of the goods from the depot was made on 8.5.2001 at the rate of Rs.5,500/- per kg. The rate of Rs.5,500/- per kg. continued from 8.5.2001 to 5.6.2001 in invoices No.1 to 23. We find that the transaction value of such goods sold from the depot at or about the same time (during the period 23rd April 2001 to 3rd May 2001) is not available. Therefore, under Rule 7 of the Valuation Rules, the value of the goods under assessment shall be the transaction value of the goods sold from the depot at the time nearest to the time of removal and in the present case, the time nearest to the period of 23.4.2001 to 3.5.2001 is 8.5.2001. We, therefore, hold that the lower authorities have rightly ordered the assessment of the goods at Rs.5,500/- per kg. at which the goods were sold on 8.5.2001 from the depot. We, therefore, find no infirmity in the impugned order.

6. We are in agreement with the aforesaid observation and conclusion of the Co-ordinate bench of Tribunal. Consequently, the Ld. Commissioners order is upheld and Revenues Appeal being devoid of merit is dismissed.

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

SD/ SD/

(I.P.LAL) (D.M.MISRA) MEMBER(TECHNICAL) MEMBER(JUDICIAL) sm

5 Appeal No.Ex.Ap.534/07