TMI Blog2003 (9) TMI 193X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, SCN was issued by Range Superintendent vide F. No. RII/GMSSK/SCN/95/1169, dated 2-11-95 demanding the differential duty of Rs. 2,636/- calculating at the rate of Rs. 601/- PMT for the entire quantity cleared during the month. The Assistant Commissioner, Central Excise, Nanded vide his OIO No. 71/96, dated 9-1-96 has withdrawn the SCN holding that the normal practice of sale of molasses is through calling for Tenders. After checking the bidding a contract is entered, into sale to the bidder who wins the tender. Thus, in case of sales through contracts, each contract is signed for a different price depending upon the quotations. All the molasses sold against a particular contract is sold at that price regardless of on what date the mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alue of molasses as Rs. 1,000/- PMT. The Commissioner (A), Pune vide OIA No. A-502/97, dated 28-11-97 has rejected the appeal finding that, in this case Department has not doubted genuineness of the price, at which molasses were sold. Merely because prices were lower than the cost of production, assessment is being sought to be made at the price of Rs. 1,000/- PMT being the cost of production + other incidential charges. This is totally incorrect as under Sec. 4, once the normal price at which the goods are sold is available, the Department cannot reject the normal price merely because it is less than the cost of production, specially when the genuineness of the price is not in doubt. Since the Department has not questioned the genuinenes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Institute, Pune has determined the cost of production of molasses as Rs. 852/- PMT without adding any overheads irrespective of grade of molasses. Adding the minimum overheads, the value cannot be less than Rs. 1,000/- PMT or at least they should have paid the duty considering minimum value of molasses as Rs. 1,000/- PMT. (3) The Assistant Commissioner should have considered the fact that the production cost of molasses itself is higher than the value of clearances and recovered the duty, considering the value of molasses as Rs. 1,000/- PMT. (4) During the same month of clearances i.e., in August '95, the assessee have cleared the molasses at Rs. 601/- PMT and paid duty accordingly. Then, taking into consideration the fact t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The fact that the two clearances were effected on the basis or different contracts entered into and that the contracts are not being questioned is not disputed by Revenue. The clearances are on different invoices dated 5-8-95 and 11-8-95 of the molasses from the same tank but at prices at Rs. 601/- PMT and Rs. 575/- PMT and there are clearances on intermediate days also as it appears from the show cause notice at the rate of Rs. 575/- PMT only. The show cause notice does not allege any cost of manufacture or no wholesale sale to have been effected were taken therein. The grounds now taken by Revenue are beyond the charges raised in the notice. (b) Considering the grounds, as raised in the notice i.e whether different prices cou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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