Excise – Cestat Chandigarh: As the total invoice value subsumes the CENVAT duty, the value adopted requires to be considered as a cum-duty price and hence benefit of cum-duty is available to the respondents – Appeal allowed [Order attached]
Order Date – 29 August 2023
Parties: The Commissioner of Central Excise, Chandigarh Vs M/s C.S. Zircon Private Limited
- The Respondent, M/s C.S. Zircon Private Limited, applied for amendment of the classification of the impugned products from CETSH 28.25 to 26.15 vide letter dated 28.03.2003 and filed a declaration dated 12.03.2004 showing their intent to avail the benefit of Notification No.50/2003 dated 10.06.2003. They continued to classify their products under CETSH 26.15.
- Revenue challenged the classification and held that the impugned products merits classification under CETSH 28.25.
- Meanwhile, the Department issued four show-cause notices and extended period was invoked in the first show-cause notice. The Commissioner vide impugned order held that extended period is not invokable; cum-duty benefit and SSI exemption can be allowed and benefit of CENVAT credit on all inputs and input services is permissible.
- Whether the learned Commissioner has erred in holding that extended period is not invokable and that cum-duty benefit is available to the appellant on the basis of the grounds specified in the appeal?
- The Tribunal observed that it cannot be inferred that the appellants have changed the classification with a view to avail undue benefit; even if we accept such a proposition, the intent to change the classification was informed to the department in March 2003 itself; the Department was free to cause necessary verification and to change the classification.
- The argument that verification took long time because of the procedures involved like testing by the agencies, cannot be a reason to allege suppression of fact; there should be a positive act of suppression, willful mis-statement with an intent to evade payment of duty so as to attract the provisions of Section 11A for invoking the extended period. The Department has not produced any such evidence to that effect. Therefore, it was held that the learned Commissioner had rightly held that extended period is not invokable.
- Regarding the cum-duty price, the respondents have produced the copies of the invoices issued by them. The sample invoices show the total invoice price as total assessable value at a lower level plus CST/ GST plus freight charges. Therefore, it is to be understood that the CENVAT duty is not paid and is not recovered.
- Thus, the total invoice value subsumes the CENVAT duty. Accordingly, the value adopted requires to be considered as a cum-duty price. For this reason, it was held that benefit of cum-duty is available to the respondents.