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2011 (2) TMI 643 - AT - Central ExciseTransaction value - The packaging materials and flavours are cleared for Captive consumption - while in respect of clearances duty was being paid on 115% of the cost of production - Since the assessable value determined under Central Excise Value Rules, 1975 or Central Excise Valuation Rules, 2000, has to be as close as possible to the normal price/transaction value at the time and place of removal, for determination of assessable value of the goods cleared for captive consumption, the cost of production has to be the current year’s cost of production and not previous year’s cost of production - Therefore, in this case, the practice adopted by the appellant for determining the assessable value of the goods cleared for captive consumption on the basis of the cost of production for the previous financial year was not correct. Related persons - It has been pleaded by the appellant that their sales to the Holding Company, M/s. Parle Products Ltd. have to be treated as sales unrelated persons and since the same price has been adopted in respect of other clearances for captive consumption within the unit or to sister concern/contract manufacturing units, there is no short payment of duty - As in terms of provisions of Section 4(3)(b) of Central Excise Act, 1944, as it stood during the period w.e.f. 1-7-2000 read with Rule 10 and 9 of the Central Excise Valuation Rules, 2000, if the buyer is a holding company or subsidiary company of the assessee, the assessee and the buyer would be deemed to be related persons and if the related buyer uses the goods for manufacture of these articles, the assessable value would have to be determined under Rule 8 of the Valuation Rules. Demand, interest and penalty - Under section 11AC - limitation - On account of determining assessable value on the basis of preceding years, cost of production, in some cases, there have been higher duty payment, it cannot be alleged this was done with the intention to evade the duty - Moreover, in respect of clearances within the unit for captive consumption or to sister concerns, the Cenvat credit of duty was immediately available and hence, there could not be any intention to evade the duty. The Larger Bench of the Tribunal in the case of Jay Yuhshin Ltd. (2000 -TMI - 48829 - CEGAT, COURT NO. I, NEW DELHI) has held that in such a situation, the longer limitation period cannot be invoked.
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