The Ahmedabad Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that when the excise department has seen Xerox copies of the CAS-4 certificate, before the rejecting it on the ground that it is a Xerox copy, he must have asked original from the appellant-assessee.
The bench of Ramesh Nair (Judicial Member) and Raju (Technical Member) has observed that since the adjudicating authority has observed that due to Xerox copy, a CAS-4 certificate cannot be accepted, at least the Learned Commissioner (Appeals) before him the original certificates were produced should have considered the same and after verification, the appeal could be decided accordingly. Therefore, the commissioner (Appeals) also gravely erred in not complying the principles of natural justice.
Background
The appellant/assessee has cleared the goods to their sister concerned on the value arrived at following the cost construction method i.e. 110% of the cost of production in terms of Rule 8 & 9 of the Central Excise Valuation Rules, 2000.
As per the case of the department in the present matter, since, the appellant did not submit CAS- 4 Certificate issued by the Cost Accountant to the department, various show cause notices were issued.
The show cause notice is 02.03.2016 for the period February-2015 to November- 2015, in which the value was proposed to be determined as per 110% of value mentioned in the invoice raised to the sister concerned. In other words the show cause notice presumed that the invoice value is cost of manufacture and 10% was added over and above the said invoice value.
The differential duty demand was confirmed by adjudication of the said show cause notice.
Arguments
The assessee contended that the demand was confirmed only on the basis that the appellant have not submitted CAS-4 certificate. It is recorded in the Order as well as it was before the Commissioner (Appeals) that the appellant had submitted the CAS-4 certificate but the same was not considered. As per the calculation of duty the duty payable as per CAS-4 and the actual duty paid there is excess payment. Therefore, there is no question of any differential duty demand.
The assessee argued that even if the department is in doubt about the correctness of the value computed by the appellant, the Revenue could not have straight away loaded 10% additional profit on the invoice value without carrying out the actual cost of the product manufactured by the appellant. Therefore, the show cause notice is clearly defective. Consequently, the adjudication order confirming the demand also suffered from serious infirmity. Hence, the demand is not sustainable.
Conclusion
The tribunal while allowing the appeal held that as per CAS-4 certificate now before us, no differential duty demand arose, particularly when the department in support of its allegation of undervaluation did not adduced a single evidence.
Case Title: Alok Masterbatches Ltd. Versus Commissioner of C.E. & S.T.-Daman
Case No.: EXCISE Appeal No. 12848 of 2018 – DB
Date: 18.09.2024
Counsel For Appellant: R P Jindal
Counsel For Respondent: Rajesh K Agarwal
