By TIOL News Service

MUMBAI, APR 01, 2016: THIS is a Revenue appeal.

The respondent M/s. BOCL had entered into an agreement with M/s MUSCO to install a plant for manufacture of oxygen. This land was made available by M/s MUSCO at a nominal lease of Rs.1/- per year. M/s. BOCL was selling oxygen to MUSCO at the rate which was marginally less (around 5%) than the rate at which they were selling to others. Revenue alleged that the price at which M/s BOCL is clearing the goods to MUSCO is not the sole consideration inasmuch as the low price of land was influencing the price. Revenue approached the District authority and were informed that the rent for such land should be to the tune of Rs.5,07,474/- per month.

Armed with this data, SCN was issued invoking the extended period of limitation and seeking to add such rental figure to the assessable value and to demand the differential duty thereon. Seven more normal period SCNs also made their way.

In adjudication, BOCL submitted that the rent value per month of the land as arrived by a Government Approved Registered Valueris Rs.16,989/-. The Commissioner accepted the said rent and worked out the differential duty accordingly. He also granted the benefit of limitation on the ground that the respondent had submitted the contract to the Revenue from time to time.

Revenue is aggrieved and, as mentioned, filed an appeal before the CESTAT in the year 2005.

The relief claimed in the memorandum of appeal inter alia reads -

++ Whether, after taking into consideration the facts/grounds as stated above read with the Show Cause Notice, the said order of the Commissioner of Central Excise & Customs, Raigad, as far as it relates to dropping the demand of Rs.1,76,573/- and also dropping the proceedings in respect of recovery of interest, imposition of penalties and confiscation of goods etc. is legal and proper?

The appeal was heard recently.

The Bench observed that from the memorandum it appeared that the order of Commissioner has been accepted insofar as the revision of rent for the purpose of addition to the assessable value is concerned and accordingly the demand had been re-calculated. Furthermore, the dispute involved an amount less than Rs.10 lakhs, while the EA-3 Form wrongly mentioned the same as Rs.99,41,351/-.

Taking note of the fact that the amount involved was less than Rs.10 lakhs and in view of the new litigation policy of the Government (dated 17.12.2015) amending the earlier instruction in F.No.390/Misc./163/2010-JC, dated 17.08 2011 and enhancing the monetary limit to Rs.10 lakhs for filing appeals, the appeal of the Revenue was dismissed without going into the merits of the case.

(See 2016-TIOL-770-CESTAT-MUM)