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2013 (8) TMI 461 - AT - Central ExciseTransfer of manufactured product to another unit - Captive Consumption – Rule 8 of Valuation @ 110%/115% of cost of production - Appellants manufactured wire rods and stock transferred the same to their Borivali unit on payment of duty. - On scrutiny of records by the department, it was observed that the appellants while computing the cost of production of wire rods only took into consideration the cost of production of the billets instead of 115% /110% of the cost of production of the billets, which resulted in short payment of duty – There is short payment of duty inasmuch as the assessable value of wire rods should be 115%/110% of the cost of production of billets – Held that:- As per the case of Nirlon Ltd. vs. CCE [2004 (10) TMI 363 - CESTAT, MUMBAI], the concept of revenue neutrality is not novel to a manufacturer where the goods are modvatable. Thus the Goregaon factory is aware that whatever duty is discharged while clearing the goods to Tarapur unit the latter will be in a position to take such duty as Modvat credit. Despite that if an unit chooses to suppress certain facts and thereby short pays duty, the consequences of such action would befall him. As per the Larger Bench in Jay Yuhshin Ltd. v. CCE, New Delhi [2000 (7) TMI 105 - CEGAT, COURT NO. I, NEW DELHI] - Revenue neutral situation comes about in relation to the credit available to the assessee himself and not by way of availability of credit to the buyer of the assessee's manufactured goods – In case two assessees albeit belonging to the same group - We are not aware as to what financial considerations the Goregoan unit had in mind when it chose to deliberately understate the value of the goods manufactured and cleared by it to the Tarapur unit nor are we expected to go into such calculations. Revenue neutrality is a concept known to both the units. The allegation of evasion does not get mitigated by the fact that one unit is entitled to take Modvat credit of duty paid by the other – Held that:- The appellants recognize the cost as 115%/110% of the cost of production which is nothing but a conscious and positive act on the part of the appellant. Similarly, short payment of duty by under valuation of wire rods is equally a conscious and positive act of suppression of facts on the part of the appellant - Raising a hypothetical question and taking shelter of revenue neutrality does not come to the appellant's rescue – Decided against the Assessee.
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