2015 (5) TMI 101 - SUPREME COURT

Extended period of limitation - Valuation of Tyre Cord Yarn (TCY) and Tyre Cord Fabric (TCB) - captive consumption - difference between the goods which were cleared at the factory gate to be sold to the third parties and removed for captive consumption by the appellant itself - held that:- the two kinds of goods were not comparable with each other and therefore, the goods which were removed for captive consumption to be used by Tarapur Factory were to be valued under Rule 6(b)(ii) of the Rules and the price declaration given by the appellant applying Rule 6(b)(i) of the said rules was erroneous. We also find that the appellant had even admitted some variations in the two types of goods in its reply to the show cause notices itself. In these circumstances, insofar as the opinion of the authorities with regard to different nature of the goods is concerned, that does not call for any interference by this court.

Imposition of penalty - Held that:- It is stated at the cost of repetition that when the entire exercise was revenue neutral, the appellant could not have achieved any purpose to evade the duty. - Therefore, it was not permissible for the respondent to invoke the proviso to Section 11A(1) of the Act and apply the extended period of limitation. In view thereof, we confirm the demand insofar as it pertains to show cause notice dated 25.02.2000. However, as far as show cause notice dated 03.03.2001 is concerned, the demand from February, 1996 till February, 2000 would be beyond limitation and that part of the demand is hereby set aside. Once we have found that there was no mala fide intention on the part of the appellant, we set aside the penalty as well. - Decided partly in favour of assessee.