Skoda Auto (India) Ltd vs Commissioner Of Central Excise, ...

(Arising out of Order-in-Appeal No. RKR(96)03/2006 dated 14.7.2006 passed by Commissioner of Central Excise & Customs (Appeals), Aurangabad)

For approval and signature:

Honble Mr. P.K. Jain, Member (Technical) and Honble Mr. S.S. Garg, Member (Judicial)

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1. Whether Press Reporters may be allowed to see : No 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 : Seen of the Order?

4. Whether Order is to be circulated to the Departmental : Yes authorities?

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Skoda Auto (India) Ltd. Appellant Commissioner of Central Excise, Aurangabad Vs. Commissioner of Central Excise, Aurangabad Respondent Skoda Auto (India) Ltd.

Appearance: Shri Sanjeev Dahiya, General Manager, for assessee Shri N.N. Prabhudesai, Superintendent (AR), for Revenue

CORAM: Honble Mr. P.K. Jain, Member (Technical) Honble Mr. S.S. Garg, Member (Judicial)

Date of Hearing: 10.8.2015 Date of Decision: 10.8.2015

ORDER NO

Per: P.K. Jain

The facts of the case are that the appellant-assessee is a manufacturer of car. During 2002-03, the assessee cleared eight cars manufactured by them for their own use. While clearing the car, they took the assessable value as was applicable for such cars being cleared to other customers and paid duty accordingly. Revenue issued them a show cause notice on the ground that the value should be arrived at 115% of the cost of production under Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. The case was adjudicated by the original authority who dropped the proceedings. Aggrieved by the said order, Revenue filed an appeal before Commissioner (Appeals). The Commissioner (Appeals) vide the impugned order held that the value should be determined under Rule 11 read with Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. He confirmed the entire demand. However, he waived the penalty since the matter relates to interpretation of law and statute. Revenue is in appeal against the waiving of penalty while the assessee is in appeal on the merits of the issue.

2. Learned representative, Shri Sanjeev Dahiya, General Manager from the assessee, appeared in person. He submitted that before the original authority as well as the Commissioner (Appeals), they have submitted certificate indicating that even if the value is arrived at under Rule 8 i.e. cost of production plus 15% profit margin, even then the demand will work out to only Rs.27,566/-. He further submitted that in fact, in respect of two vehicles, the value is less than the value on which they had paid the duty. He further submitted that even though the said certificate was produced before the Commissioner (Appeals) and the Commissioner (Appeals) has taken the view that the value is to be determined under Rule 11 read with Rule 8, even then in the last para, he has confirmed the entire demand, i.e. Rs.3.26 lakhs. He also submitted that even if the demand was to be upheld, it can be upheld only to the extent Rs.27,566/-. He further submitted that on merits, the issue is covered by the Larger Bench of this Tribunal in the case of Ispat Industries Ltd. vs. CCE, Raigad reported in 2007 (209) ELT 185 (Tri.-LB). He further submitted that in view of the said decision of the Tribunal, even the demand of Rs.27,566/- will not stand. In addition to this submission, the learned counsel also submitted that the department has invoked extended period of limitation. He submitted that there was no suppression of fact or any other thing so as to justify the invocation of extended period of limitation.

3. Learned AR, on the other hand, submitted it would be seen from the show cause notice that they have paid the duty on Rs.53.92 lakhs while the cost capitalized was Rs.55.72 lakhs (net of taxes) and the department added 15% on the amount of Rs.55.72 lakhs. He further submitted that the Chartered Accountants certificate covers only seven vehicles while from the body it is clear that they have cleared eight vehicles. The learned AR further submitted that the details about the cost of production etc. were not made available to the department and hence extended period of limitation is justified.

4. We have considered the submissions of both the sides. We find that in this case the cars cleared have not been utilized for further manufacture of goods but were used by the officials of the company in connection with the business. In our view, Rule 8 is not directly applicable and it would be more appropriate to determine the value under Rule 11 read with Rule 4 and the assessee has paid the duty correctly. We also find that the Larger Bench of this Tribunal in the case of Ispat Industries Ltd. (supra) supports the contention of the assessee. We also find force in the contention of the assessee that extended period is not invokable. We do not find any justifiable ground in the show cause notice so as to invoke the extended period. Even the learned Commissioner (Appeals) has dropped the penalty keeping in view the issue involved is interpretation of law. In our view, in the facts and circumstances of the case, invoking the extended period of limitation is not justified.

5. In the result, the assessees appeal is allowed and Revenues appeal is dismissed. Cross objections filed by the assessee are also disposed of in above terms.

(Pronounced in Court)

(S.S. Garg) Member (Judicial) (P.K. Jain) Member (Technical)

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