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2014 (11) TMI 703 - HC - Central ExciseCaptive consumption - excise duty upon molasses - Suppression of value of goods - Demand of differential duty - Held that:- all other show cause notices issued to the petitioner on the same ground from the year 1994 to 1997 have been withdrawn except the present show cause notice which claims payment of difference of excise duty for a period of two months i.e. January and February 1995. The only explanation coming forth is while filing reply to other show cause notices, the petitioner had raised a dispute about the gradation of the molasses and in the reply to present show cause notice no such dispute was raised. The assessee would not have the advantage of viewing the comparable goods as it would not have any domain over it, nor has opportuiiity to test it. The provisions and the proviso cast duty on the proper officer to verify the same. There are various grades of molasses. The show cause notice, nor impugned orders even remotely suggest that proper officer has considered the material characteristic of goods assessed and comparable goods. It nowhere suggest that quality of both molasses is same. The burden is upon the proper officer. If the proper officer would have considered various factors, so also material characteristics of comparable goods while valuing the goods of petitioner, then the burden would have shifted on the assessee. However, in the first instance the proper officer has not discharged the burden and the obligation cast upon him so as to shift the burden upon the petitioner. In the show cause notice only a bald averment is made that nearby sugar factory is selling molasses at the rate of ₹ 1310/- per metric tonne. Even, if, arguments of learned Assistant Solicitor General is considered referring to provisions of Sec. 6(b)(ii) of the Central Excise (Valuation) Rules, 1975, same would be of no avail inasmuch as sub-clause (ii) comes into operation, if the value cannot be determined under sub-clause (i) on the cost of production or manufacture including profits, which the assessee would have normally earned on the sale of such goods. Perusal of show cause notice, it transpires that the sole basis for issuing show cause notice is that nearby sugar factory is selling molasses at the rate of ₹ 1310/- per metric tonne and the petitioner is claiming rate at ₹ 850/- per metric tonne without satisfying about all the other relevant factors and in particular the difference if any in the material characteristics of the goods to be assessed and the comparable goods. The show cause notice nowhere discloses that the authority satisfied itself about the material characteristics of the goods to be assessed and of the comparable goods. In absence thereof, the said show cause notice cannot be sustained. - Decided in favour of assessee.
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