Page 175 - ELT_15th August 2020_Vol 373_Part 4

2020 ] COMMISSIONER OF CGST & CX, THANE v. MAHINDRA & MAHINDRA LTD. 509

904/WZB/2004/C-II, dated 7-10-2004, a direction was given to the
adjudicating authority to do the valuation of captively consumed
goods according to Cost Accounting Standard 4r(CAS-4) developed
by the Institute of Cost of Work Accountants of India read with
Board’s Circular No. 692/8/2003-CX, dated 13-2-2003?
(b) Whether in the facts and circumstances of the case and in law was
the Tribunal correct in upholding that there were revenue neutrality
and if it was, then are the statutory provisions of law to be ignored
on that ground, even in cases where extended period of limitation
was attracted?
(c) Whether in the facts and circumstances of the case and in law was
the Tribunal right in upholding that the case was revenue neutral
without considering the facts of the case where there was larger
question of evasion of duty through undervaluation and imposition
of penalty and interest thereof?
3. However, at the hearing of this Appeal, Shri Jetly, the Learned
Counsel appearing in support of the Appeal restricts the Appeal only to the
question No. (c) above.
4. The impugned order dated 13 January 2013 of the Tribunal is a
common order allowing the Respondents two Appeals. One filed by its Auto Di-
vision and the other by its Tractor Division. This Appeal of the Revenue is only
against the order relating to Tractor Division of the Respondent.
5. The Respondent is a manufacturer of I.C. Engines and parts at its fac-
tory in Mumbai. These engines are being cleared to their units located in Nagpur
and Rudrapur for use in the manufacture of tractors. At all times relevant to this
Appeal i.e. November 1996 to March 2001, tractors are chargeable to excise duty.
6. The dispute in the present case is with regard to the appropriate val-
uation of the IC Engines and parts thereof which are captively consumed in
terms of Valuation Rule 6(b)(ii) of the erstwhile Central Excise (Valuation) Rules
1975 (“Valuation Rule”).
7. The Respondent arrived at the valuation of its I.C. Engines and parts
thereof by adoption of cost construction method as provided in Rule 6(b)(ii) of
the Valuation Rules. The Revenue objected to the valuation arrived at by the Re-
spondent. This on the ground that Rule 6(b)(ii) of the Valuation Rules has not
been properly applied, as various expenses which need to be included are not
included to arrive at the cost of production of I.C. Engines and parts thereof.
Thus, the demand by the Revenue for the differential duty payable on the I.C.
Engines and parts thereof, cleared for captive consumption to manufacture trac-
tors at Nagpur and Rudrapur.
8. The impugned order dated 13 January 2017 of the Tribunal allowed
the Respondent’s Appeal. This by inter alia holding that the entire exercise of de-
termining the correct costs of the I.C. Engines and parts thereof for payment of
duty would be academic. This for the reason that the entire differential amount
of the duty paid on I.C. Engines and parts thereof would be available as credit to
the Respondent’s tractor divisions at Nagpur and Rudrapur and utilized in pay-
ment of duty on tractors. Thus, the impugned order also records the fact that as it

EXCISE LAW TIMES  15th August 2020  175