2024-VIL-1098-CESTAT-KOL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Valuation, captive consumption – appellant cleared the goods availing the benefit of Notification No. 20/2007-CE dated 25.04.2007 – valuation of stock transfer of "Mosquito Repellent Refills" to sister unit, which were sent to a job worker for making a combo pack - Department alleged that the appellant adopted MRP based valuation for goods stock transferred to the sister unit, resulting in over-valuation and excess refund of excise duty under the said notification – Validity of recovery of alleged erroneous refund of excise duty without challenging the original refund sanction orders - whether the valuation of goods cleared to the sister unit should be determined under Rule 4 or Rule 8 of the Central Excise Valuation Rules, 2000 – HELD - without challenging the original refund sanction orders, the department cannot proceed with the recovery of the alleged erroneous refund under Section 11A of the Central Excise Act - parallel proceedings for recovery of refund cannot be launched without revising the refund sanction orders - Further, the provisions of Rule 8 of the Valuation Rules would apply only in cases where the entire production of goods is captively consumed, and not in a situation where the goods are partly cleared to independent buyers and partly to the sister unit - following the ratio laid down by the Larger Bench of the Tribunal in the case of Ispat Industries Ltd. vs. CCE, Raigad, it is held that the valuation of goods cleared to the sister unit should be determined under Rule 4 of the Valuation Rules – it is held that, the department cannot proceed with the recovery of the alleged erroneous refund without challenging the original refund sanction orders, and that the valuation of goods cleared to the sister unit should be determined under Rule 4 of the Valuation Rules - the appeal is allowed by setting aside the impugned order
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