2004 (97) ECC 774 (Tri)

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL

New Delhi -- Bench-NB(C)

Shri S.S. Kang, Member (J) and Shri V.K. Agrawal, Member (T)

K.L. Concast Ltd.

Versus

CCE, Ghaziabad

Appeal No. E/3989/2003-NB(C)

[Arising out of Order-in-Appeal No. 438-CE/APPL/GZB/2003 dated 22.10.2003 passed by the Commissioner (Appeals) Central Excise, Ghaziabad]

Final Order No. 453/2004-NB(C), dt. 25.6.2004, Certified on 13.7.2004

Valuation (C. Excise)

Clearance for Home Consumption -- Whether the value of clearance of excisable goods liable to Central Excise duty under Sec. 3A of the Central Excise Act is to be taken into consideration for the purpose of ascertaining the aggregate value of clearances of all excisable goods for home consumption during the preceding financial year -- (Yes) -- Sec. 3A r/w Secs.4, 4 A of CEA.

Benefit of Notification No. 9/2000-CE dt. 1.3.2000

Clearances of Hot Re-rolled products of non-alloy steel and ingots and billots of non-alloy steel on which duty of excise has been paid under Section 3A to determining the aggregate value of clearances of home consumption during the preceding financial year Notification contains 3 types of values as under : (i) Value under Sec. 4 of the CEA. (ii) Value under Sec.4 A of the CEA. (iii)Tariff Value as fixed under Sec. 3 of the Act.

PRESENT :

Shri Rajesh Chibber, Adv. for the appellant.

Shri H.C. Verma, JDR for the respondent.

Per : V.K. Agrawal

The issue involved in this appeal, filed by M/s. K.L. Concast Ltd., is whether the value of clearances excisable goods liable to Central Excise duty under Section 3A of the Central Excise Act is to be taken into consideration for the purpose of ascertaining the aggregate value of clearances of all excisable goods for home consumption during the preceding financial year.

2. Shri Rajesh Chibber, learned Advocate, submitted that the Appellants manufacture shapes, sections, bars and rods of non-alloy steel; that prior to 1.4.2000 they were working under Compounded Levy Scheme as envisaged in Section 3A of the Central Excise Act; that from 1.4.2000 the duty became liable to the discharged on the goods manufactured by them under Section 3 on ad valorem basis in terms of Section 4 of the Central Excise Act; that they filed a declaration claiming benefit of SSI Notification No. 9/2000-CE dated 1.3.2000; that the Dy. Commissioner under Order-in-Original No. 166/2000 dated 18.12.2000 disallowed the benefit of the Notification on the ground that the value of clearances of the goods under Section 3A is to be taken into account for the purpose of considering the limit of Rs. 300 lakhs and the value of clearances had exceeded Rs. 300 lakhs; that the Commissioner (Appeals) had also under the impugned Order rejected their appeal. He, further, submitted that while defining the term "Value" under clause 5(C) of the Notification No. 9/2000-CE dated 1.3.2000 clearances under Section 3A of the Act has not been mentioned. According to clause 5(C) of the Notification value means in respect of specified goods which have been notified under Section 4A of the Act as determined in accordance with the provisions of that Section and in respect of specified goods other than those referred to above the value as determined in accordance with the provision of Section 4 of the Central Excise Act or the Tariff Value fixed under Section 3 of the Act; that the said clause nowhere defines the value of the goods covered by Section 3A of the Act; that therefore, the value of the clearances of the goods covered under Compounded Levy Scheme is not to be included while determining the aggregate value of the goods cleared from the factory under Notification No. 9/2000; that if the intention of the Legislature was to debar the factories who were working under Section 3A of the Act from the benefit of Notification No. 9/2000 a mention of the same should have been made in clause 5(C). We also heard Shri H.C. Verma, learned DR who reiterated the findings as contained in both the Orders passed by the lower authorities.

3. We have considered the submissions of both the sides. The benefit of Notification No. 9/2000-CE dated 1.3.2000 is available to the goods specified in the table below the Notification subject to the conditions, inter alia, that the aggregate value of the clearances of all excisable goods for home consumption by a manufacturer from one or more factories or from a factory of one or more manufacturer does not exceed Rs. 300 lakhs in the preceding financial year. Para 3 of the Notification mentions some of the clearances which shall not be taken into account for the purpose of determining the aggregate value of clearances for home consumption. It is evident from Para 2 that the value of clearances of all excisable goods has to be taken into consideration for determining the aggregate value of clearances during the preceding financial year. It is not in dispute that the goods manufactured by them and cleared after discharging the duty liability under Section 3A of the Central Excise Act during the preceding financial year are excisable goods. Further, Para 3 of the Notification also nowhere provides that the value of the clearances of the goods which have suffered duty under Section 3A of the Act is not to be taken into account for determining the aggregate value of the clearances for home consumption. What has been excluded from taking into account by inserting clause (e) and clause (f) by Notification No. 31/2000-CE dated 31.3.2000 is clearances of Hot Re-rolled products of non-alloy steel and ingots and billots of non-alloy steel on which duty of excise has been paid under Section 3A and which are lying in stock on 31.3.2000. These two Sub-clauses make it very clear that the value of clearances of the goods on which duty of Excise has been paid under Section 3A of the Act is to be taken into account for determining the aggregate value of clearances of home consumption during the preceding financial year and the value of clearances of those goods which were lying in stock on 31.3.2000 is only to be excluded.

4. There is no substance in the submissions of the Appellants that Para 5 of Notification No. 9/2000 while defining the value does not refer to Section 3A of the Act at all. There is no need to mention Section 3A at all the Clause (C) of Para 5 as this clause provides the definition of `Value' for arriving at the value of clearances for the purpose of determining the aggregate value of clearances for different purposes under the Notification. Notification uses phrase "Aggregate Value" at different places. The question arises as to what is the meaning of Value. Central Excise Act contains 3 types of values as under:

(i)  Value under Section 4 of the Central Excise Act.

(ii) Value under Section 4A of the Central Excise Act.

(iii) Tariff Values as fixed under Section 3 of the Act.

5. Keeping in view of 3 types of values provided under the Central Excise Act, clause (C) of Para 5 of the Notification specifies that in respect of goods notified under Section 4A the value has to be taken as determined under Section 4A of the Act and in respect of other goods, the value would be as per Section 4 of the Central Excise Act or Tariff Value fixed under Section 3 of the Act. As the goods which have been notified under Section 3A of the Central Excise Act for the purpose of levy of duty on the basis of Annual Capacity of Production have not been notified under Section 4A of the Act and Tariff Value have also not been fixed under Section 3 of the Central Excise Act the value of their clearances has to be determined under Section 4 of the Central Excise Act i.e. transaction value. Thus, the value of clearance of the excisable goods which were leviable to Excise duty under Section 3A of the Central Excise is to be taken into account for determining the aggregate value of clearance for how consumption during the preceding financial year. We, therefore, find no infirmity in the impugned Order and reject the appeal.

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