The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ruled that Certificates when issued by qualified professionals like cannot be rejected for want of corroborative evidence.
The appellant, Rajashree Polyfil, is engaged in the manufacture of Nylon Chips and Pet chips falling under Chapter 39 of the First Schedule to the Central Excise Tariff Act, 1985.
In view of the audit objection, it was alleged that there was a short payment of duty on clearance of polyester and nylon chips on the ground that the appellant had wrongly deducted 9.5% towards moisture content from the cost price determined as per CAS-4. Accordingly, a Show Cause Notice (SCN) was issued alleging short payment of Central Excise duty.
The appellant produced CAS-4 certificates issued by the Cost Accountant and another certificate from the Cost Accountant obtained subsequently which certified that the cost shown in the CAS-4 certificates for 2007-08 & 2008-09 was in respect of dry chips and certifying that the moisture content in the wet chips cleared from the factory was 9.32% and 9.4 % respectively of the gross weight of wet chips.
The Counsel for the appellant claimed that the impugned order failed to take into account the evidences submitted by the appellant in reply to Show Cause Notice i.e. a Certificate issued by its HOD (QC), certifying the moisture content in RP extracted chips, Copy of independent cost accountant certificate and Copy of chartered engineer report dated 10.05.2012 who after physical verification certified that the moisture content after the centrifugal stage was in the Range of 9-13%.
The Two-Member Bench of the Tribunal comprising Ramesh Nair, Judicial Member and CL Mahar, Technical Member observed that “It is a settled principle of law that the certificates issued by qualified professionals like Cost Accountants, Chartered Accountants, Chartered Engineers should not be brushed aside merely with the statement that corroborative evidence was not produced. They need to be accepted by the department unless investigation is undertaken in doubtful cases and the data is re-verified by appointing its own cost accountant or producing another material on record.”
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