By TIOL News Service

MUMBAI, DEC 15, 2017: APPELLANT cleared cement on payment of Central Excise duty of Rs.400/- per metric tonne for their own use during the period from 1st January 2008 to 30th April 2008 claiming that the duty liability was restricted to that prescribed in serial no. 1C of notification 4/2006-CE.

The said exemption is accorded to goods, whether or not manufactured in a mini cement plant, not covered by serial no. 1B, other than those cleared in a packaged form with an effective rate of duty of 14% or Rs.400/- per tonne, whichever is higher, for goods falling under heading no. 252329 of Schedule to CETA, 1985.

The original authority denied the appellant the benefit of exemption and this order was upheld by the Commissioner(A).

The ground for confirmation of the demand is that the benefit of this notification was patently limited to sales which the transaction of the assessee was not as it was provided to itself. Consequently, additional duty leviable from the appellant was computed as Rs.3,32,484/- with the application of the standard rate of duty of Rs.600/- per tonne.

The appellant is before the CESTAT.

None appeared on behalf of the appellant.

The AR reiterated that captive consumption is not a sale and hence retail sale price intended by the notification is not available to appellant.

In their written submissions the appellant contended that self-consumption is to be considered at par with sale to another entity and the benefit of exemption is to be extended as held in the cases of India Cements Ltd - 2016-TIOL-147-CESTAT-MAD, Heidelberg Cement (India) Ltd - 2014-TIOL-1433-CESTAT-MUM, Ambuja Cements Ltd - 2017-TIOL-189-CESTAT-DEL, Mysore Cements Ltd - 2010-TIOL-702-HC-KAR-CX and Grasim Industries Ltd - 2008-TIOL-2328-CESTAT-MAD.

After considering the submissions, the Bench inter alia observed -

+ This conclusion (of Revenue) appears to emanate from a hypothesis that this notification is one that pertains to assessment for which one of the basis is retail sale price.

+ The impugned notification has been issued under section 5A of Central Excise Act, 1944 with intent to prescribe effective rates of duty for clearance of goods specified therein and is to be applied to achieve that intent.

+ There are notifications that pertain to the manner of computing assessable value of goods that are required to be declared in accordance with the mode prescribed in section 4A of Central Excise Act, 1944.

+ Applicability of a rate of duty, merely because it has reference to sale price, does not mandate the condition of sale which may be relevant in a notification issued under section 4A of Central Excise Act, 1944.

+ As long as the liability to duty that crystallises on a like transaction with another entity is discharged, there is no scope for a different treatment.

Concluding that the benefit claimed by the appellant cannot be denied, the impugned order was set aside and the appeal was allowed.

(See 2017-TIOL-4415-CESTAT-MUM)