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2014 (7) TMI 317 - CESTAT NEW DELHIValuation of goods - Undervaluation of goods - Alloy and Non-Alloy Round - department was of the view that the value addition shown by the appellant during the period of dispute was very low - totalling up the expenses on coal, electricity, wages, castings and consumables, metal rolls/lubricants, cartages/general expenses and the gross profit - Held that:- very basis of determining the value addition per matric tonne during each financial year is not correct and hence, in our view, no duty can be demanded merely on this basis. Moreover neither any inquiry has been conducted with the appellant's customers to ascertain as to whether any amount over and above the invoice price had been charged by the appellant nor any inquiry has been conducted for ascertain as to what was the prevailing market price of the alloy and non-alloys rounds during each financial year. If the prevailing market price of the alloy and non-alloys rounds during the period of dispute was much higher than the price at which the appellant were showing the sale, there could have been a basis for doubting the declared assessable value, but no such inquiry has been conducted. When in terms of Section 4 (1) of the Central Excise Act, 1944, the assessable value is the transaction value as defined in this Section and the transaction value of the goods at the time and place of removal i.e. at factory gate, is available and no evidence has been produced indicating that the sale price had been under declared, there is no justification for determining the transaction value by cost construction method which, in turn, is based on the arbitrarily determined valuation addition. The impugned order is, therefore, not sustainable - Decided in favour of assessee.
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