R.S.R. Mills Vs. Commissioner of Central Excise - Court Judgment

Excerpt:
1. the appellants were determining the valuation of the fabrics processed as per the decision in ujagar prints' case by the supreme court. they availed deemed credit benefit under notification 29/96-c.e.(n.t.), dated 3-9-96 to the extent of 40% of the duty payable on cotton fabrics and 50% on mmf. in effect, the total duty discharged on the fabrics comprised of 40% or 50% from deemed credit account and 60% or 50%, as the case may be, from pla. department is of the view that the discharge of duty from deemed credit account was an additional consideration which was liable to be added to arrive at assessable value of the processed fabrics. accordingly, notice was issued & duty demands confirmed along with penalty and penalty under rule 209a on the director. hence these appeals.2.1 duty discharge from deemed credit account or pla, is discharge of duty. duty on the processed fabric, as discharged, was at effective rate of 16% ad valorem and the entire quantum of this discharge was deductible under the provisions of section 4(4)(d)(ii) explanation. no distinction can be made, whether the discharge was from pla or credit register deemed or otherwise. the document prepared would be considered to be effective 100% duty paid (even if 40% or 50% is from deemed credit and remainder 60% or 50% from pla) & the buyer would be eligible to credit by 100% of the amount as shown. notification 29/96-c.e.(n.t.) does not reduce the effective rate of duty.2.2 when the document showing duty discharge read with notification no.29/96-c.e. (n.t.) to be the effective rate, 40% or 50% therefore, as discharged, cannot be an additional consideration calling for an addition to determine assessable value.2.3 since the 40% or 50% of the amount of duty discharge from deemed credit account, is discharge of duty levied, there is no case or cause for invoking of section 11d provisions in that respect also.2.4 we find no merits in the department's findings as arrived at. to uphold the demands and or call for penalty on the assessee or the director.

Judgment:
1. The appellants were determining the valuation of the fabrics processed as per the decision in Ujagar Prints' case by the Supreme Court. They availed deemed credit benefit under Notification 29/96-C.E.(N.T.), dated 3-9-96 to the extent of 40% of the duty payable on cotton fabrics and 50% on MMF. In effect, the total duty discharged on the fabrics comprised of 40% or 50% from deemed credit account and 60% or 50%, as the case may be, from PLA. Department is of the view that the discharge of duty from deemed credit account was an additional consideration which was liable to be added to arrive at assessable value of the processed fabrics. Accordingly, notice was issued & duty demands confirmed along with penalty and penalty under Rule 209A on the Director. Hence these appeals.

2.1 Duty discharge from Deemed Credit account or PLA, is discharge of duty. Duty on the processed fabric, as discharged, was at effective rate of 16% ad valorem and the entire quantum of this discharge was deductible under the provisions of Section 4(4)(d)(ii) explanation. No distinction can be made, whether the discharge was from PLA or credit register deemed or otherwise. The document prepared would be considered to be effective 100% duty paid (even if 40% or 50% is from deemed credit and remainder 60% or 50% from PLA) & the buyer would be eligible to credit by 100% of the amount as shown. Notification 29/96-C.E.(N.T.) does not reduce the effective rate of duty.

2.2 When the document showing duty discharge read with notification No.29/96-C.E. (N.T.) to be the effective rate, 40% or 50% therefore, as discharged, cannot be an additional consideration calling for an addition to determine assessable value.

2.3 Since the 40% or 50% of the amount of duty discharge from deemed credit account, is discharge of duty levied, there is no case or cause for invoking of Section 11D provisions in that respect also.

2.4 We find no merits in the department's findings as arrived at. to uphold the demands and or call for penalty on the assessee or the Director.