M/S. Agmeco Faucets Pvt. Ltd vs Cce, Delhi-I

The appellant are manufacturers of bathroom fittings chargeable to Central Excise Duty under sub-heading 84818020 and 74199920 of the Central Excise Tariff. The period of dispute is from 1/4/2009 to 18/08/2009 of the financial year 2009-2010. The appellant during this period were availing of the SSI exemption notification no. 8/03CE. The department seeks to deny the SSI exemption in respect of the period mentioned above on the ground that during 2008-2009, their total clearances for home consumption were Rs. 4,65,98,479/- and therefore, during 2009-2010, they would not be eligible for exemption. The appellants plea, however, is that their clearances for home consumption during preceding financial year was only worth 3,36,81,178/-. Accordingly, the show cause notice was issued to the appellant for denying the SSI exemption for the period from 1/4/2009 to 18/8/2009 and demand of differential duty of Rs. 15,26,657/- along with interest thereon under section 11AB and imposition of penalty on the appellant under section 11AC. The show cause notice was adjudicated by the Additional Commissioner vide Order-in-Original dated 1/3/2014 by which the Additional Commissioner holding that in terms of the report dated 19/2/2009 of the Jurisdictional Deputy Commissioner, the aggregate value of clearances for home consumption by the appellant during 2008-09 were Rs. 4,16,15,780/-. Rs/ 3,36,81,178/- as declared by the party plus Rs. 79,94,602/- which is the differential value recalculated under section 11A confirmed the duty demand of Rs. 15,26,057/- along with interest and imposed penalty of equal amount on them under section 11AC.

1.2 On appeal being filed to Commissioner (appeals) against this order of the Additional Commissioner, the appeal was dismissed vide order-in-appeal dated 14/3/2014. Against this order of the Commissioner (appeals), this appeal has been filed along with the stay application.

2. Heard both the sides.

3. Though the matter today is listed for hearing of the stay application, after hearing of the matter for some time, the Bench was of the view that the matter can be taken up for final disposal. Accordingly, the requirement of pre-deposit is waived with the consent of both the sides, the matter is heard for final disposal.

4. Sh. Tarun Chawla, Advocate, ld. Counsel for the appellant pleaded that the appellant manufacture eight bathroom fittings out of which two items  soap dish and toilet paper are covered under section 4A and the remaining six products are assessable to duty on the transaction value determined under section 4; that if the aggregate value of the clearances during preceding year, 2008-09 for the purpose of para 2(vii) of the exemption notification no. 8/03CE is calculated on this basis, the aggregate value of clearances during 2008-09 would be only Rs. 3,36,81,178/-; that the basis on which, the Department has added Rs. 79,94,602/- to arrive at the value of Rs. 4,16,75,780/- is not known to the appellant; that as recorded in para 8 of the order-in-original, this calculation of the aggregate value of clearances during 2008-09 is based on the report dated 19/2/2003 of the Jurisdiction Deputy Commissioner; that hearing of this matter had been held on 30/01/2013 and though further hearing had been fixed on 18/2/2013, the appellant had not appeared for the same, that as such, the report dated 19/2/2013 of the Deputy Commissioner which has been relied upon by the Additional Commissioner was never made available to the appellant; that for determining the classification of the goods the judgment of the Tribunal in the case of Jaquar and Co. Ltd. Vs. Commissioner of Central Excise, Delhi-I, reported in 2011 (270) ELT 550 Tribunal is applicable and on the basis of this judgment, the appellant have determined that only two products of the eight products manufactured by them would attract section 4A and in respect of the remaining products, the duty has to be charged on the transaction value determined under section 4; that on this basis, the aggregate value of the clearances for home consumption, during 2008-09 would be only Rs. 3,36,81,178/-; that this plea had been made by the appellant before the Commissioner (appeals) and it had been mentioned that the Deputy Commissioners report was not made available to them, but no finding has been given by the Commissioner (appeals) on this point and that in view of this the impugned order, therefore, is not correct.

3. Shri Ranjan Khanna, ld. DR, for the respondent defended the impugned order by reiterating the findings of the Commissioner (appeals).

4. We have considered the submissions form both the sides and perused the records.

5. The only point of dispute in this case is as to whether the aggregate value of the appellants clearances for home consumption during 2008-09 was Rs. 3,36,81,178/- as claimed by them or had exceeded Rs. 4 crore and was valued at Rs. 4,16,75,078/- has held by the Additional Commissioner. From para 4.8 and 4.9 of the Additional Commissioners order, it is seen that the departments calculations regarding the aggregate value of clearances for home consumption during 2008-09 are based on Deputy Commissioners report dated 19/2/2013. The hearing in this case had been held on 13/01/2013. The Deputy Commissioners report dated 19/2/2013 which has been relied upon by the Additional Commissioner, has, thus, not been supplied to the appellant which would amount to violation of the principles of natural justice. The difference between the value of clearances as per the appellant and the value of the clearances as per the department, appears to be on account of the number of items which are covered for valuation under section 4A and this dispute can be resolved only when the basis of the calculation as per the Deputy Commissioners report is disclosed to the appellant. Accordingly, the impugned order is set aside and the matter is remanded to the Original Adjudicating Authority for de-novo adjudication, after supplying to the appellant, a copy of the Deputy Commissioners report dated 19/2/2013 and granting them personal hearing in respect of the same. The appeal as well as stay application stand disposed off as above.

(Rakesh Kumar) (S.K. Mohanty)

Member (Technical) Member (Judicdial)

Ritu