LexCOMMISSIONER OF CENTRAL EXCISE, RAIGAD versus M/S. ISPAT METALLICS INDUSTRIES LTD. & ORS
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
[2016) 3 S.C.R. 766.
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COMMISSIONER OF CENTRAL EXCISE, RAIGAD
B
D
E
- F
G
H
v.
MIS. !SPAT METALLICS INDUSTRIES LTD. & ORS.
(Civil Appeal No. 2562 of2008)
MAY 06, 2016
[A.K. SIKRI AND ROHINTON FALi NARIMAN, JJ.)
Central Excise Rules, 1944 - r.57AB (JC) - CENVAT Credit
Rules, 2001 - r. 3 (4) - Procurement of iron ore pellets (raw 111ateria/)
iointly by the assessee-manufacturer and its sister company under
a joint procurement policy - Credit was availed by the priiicipal
company of the duty paid on the entire quantity so procured - Later
as and when required by the sister company, the pellets were
transferred to .it by the principal company on reversing an amount
equal to the CENVAT credit availed on inputs that were so transferred
- In addition the principal company alsQ raised debit notes OJI the
sister co111pany for recovering actual expenditure incurred by it in
relation to the procuring of such iron ore pellets such as bank
charges, interest etc.- Reven.ue issued show cause notice to both
the companies stating that the amounts mentioned in the debit note
from principa.l company to sister company were also includible in
the assessable duty valuation as additional consideration because
the transaction between the two companies rl'as one. of sale and not
transfer - The show cause notice upheld by the Co111111issiV-ner -
The Tribunal reversed the order of Commissioner holding that the
transfer of the raw material by principal co111pany to its sister
company was not a sale - On appeal, held: The transaction in . .the
present case is a tramfer and not sale - As per circular dated
1. 7.2001, in case of transfe1; the value to be adopted is the value
._ shown in the invoice on the basis of which CENVAT credit was taken
by the assessee i.e. invoice of the supplier of the pellets to t_he
assessee. - Post manufacturing expenses also cannot be loaded on
to the amount equal to the duty of excise leviable on.such goods -
Central Excise Act, 1944 - s. 4{1)(a) - Circular dated 1. 7.2002.
Dismissing the appeals, the Court
766
COMMISSIONER OF CENTRAL EXCISE, RAIGAD v. MIS.,
ISPAT METALLICS INDUSTRIES LTD ..
HELD: 1. The Tribunal being the last pri11cipal ·rorum of
appreciation of facts has held that transfer of iron ore pellets by
the principal company to its sister concern was not a sale of goods
but was only a transfer of raw materials procured under the
Tripartite Agreement between the two of them and the supplier
of the said pellets. This is a pure finding of fact and the Revenue
has not been able .to dislodge thi~· finding of fact. No infirmity can
be found with the Tribunal's judgment, which· only follows the
cir'cular dated 1.7.2001. The circular makes it clear that a
distinction is made between inputs on which credit has been taken
which are removed on sale, and those which. are removed on
transfer. If removed on sale, "transaction value" on the application
of Section 4(l)(a) is to be looked at. However, where the goods
are entirely transferred to a sister unit, it is reasonable to adopt
the value shown in the invoice on the basis of which Cenvat Credit
was taken by the assessee i.e. the invoice of the supplier of the
pellets to the assessee. [Paras 10, 11 and 12] [770-G-H; 772-A-
C)
2. The Tri'bunal was also correct in holding that post
manufacturing expenses cannot be loaded on to the amount equal
767 •'
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B
c
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to the duty of excise leviable on such goods as this amount would,
then, cease to be an amount equat to the dufy of e~cise but would .
·be something more.~-Thus, the Tribunal is justified i11 its finding
.E
o~ tnw, whicli is based on its fif!ding of fact that the present is a
case of transfer and not sale. [Para"l2) [772-D)
.CJVILAPPELLATEJURISDI<;:TlON: Civil Appeal No. 2562 of
2008.
.
.
From the Judgment and Order ctated 11. I 0.2005 in Appeal Nos. E/
1462, 1093, 1509/05 of the Customs, Excise & Service Tax Appellate
Tribunal, West Zonal Branch at Mumbai
·
WITH
C.A. Ncr:8557/2015.
K. Radhakrishna, Sr. Adv., Ms. Nisha Bagchi, Ms. Pooja Sharma,
B. Krishna Prasad, Advs. for the Appellant.
V. Lakshmi Kumaran, Hemant Bajaj; Aditya Bhattacharya, Anandh
K., Ms. L. Charnaya, M.P. Devanath, Advs. for the Resporide!Jts:
F
H
\'
,/'
768
SUPREME COURT REPORTS
[2016] 3 S.C.R.
A
The Judgment of the Court was delivered by
R.F. NARIMAN, J. I. Two appeals have been filed from a
common decision of CESTAT dated 11.10.2005, whereby the TrExcerpt shown. Read the full judgment & AI analysis in Lexace.