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2014 (12) TMI 993 - CESTAT MUMBAIValuation of goods - Addition of 4% notional profit to the processing charges - Addition on whether the fabrics cleared by the appellant vide 22 invoices mentioned in the show cause notice are Velvet fabrics or not - Commissioner has dropped the demand of excise duty on the 4% notional profit on the ground that the processing charges collected includes the profit elements and therefore, there is no need to make further addition towards profit - Held that:- The claim of the appellant is that they are man-made fabrics. The basis of the Revenue’s claim is that samples drawn from Lot No. 12831 and 14954 were opined to be velvet fabrics by SASMIRA. Samples drawn from the same lot No. by the appellant and subjected to test by SASMIRA vide test report dated 10-8-1998 show them to be other than velvet fabrics. These two lot nos. pertained to invoice No. 5854, dated 16-2-1998 whereas in the show cause notice, the invoices referred to thereunder pertains to the period August, 1997 to January, 1998 and the said invoice does not figure in the show cause notice. In these circumstances, the Revenue has not established its case that the fabrics processed and cleared during August, 1997 to January, 1998 were Velvet fabrics falling under Chapter 58. As regards Revenue’s appeal, since the job-charges already includes profit of the job-worker, the question of adding notional profit of 4% does not arise. Impugned demand is not sustainable in law and consequently the demand for interest under Section 11AB and equivalent amount of penalty imposed under Section 11AC and penalties of ₹ 25,000/- and ₹ 10,000/- imposed respectively on Shri D.G. Agarwal and Shri S.B. Yadav, Excise official of the appellant firm do not survive - Decided in favour of assessee.
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