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2020 (1) TMI 375 - CESTAT CHANDIGARHValuation - stock transfer or sale - applicability of Rule 8 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - extended period of limitation - penalty - HELD THAT:- The argument of the appellant that since they were not making any profit during the relevant period and hence they were correct in paying duty on only 100% of the cost of production instead of 110% mandated by the rule has no legal basis to stand on. Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 does not depend on the extent of profit earned by the appellant. They could a running in loss or earning a 1000% profit. The valuation as per is captively consumption has to be at 110% of the cost of production. This rule was clearly openly defied by the appellant, in order to evade payment of central excise duty. The fact that their sister concern will get CENVAT Credit of duty paid has no bearing either on the excisability of the goods or on their valuation. The appellant willingly evaded payment of duty because they decided that they will pay duty only on 100% of the cost of production even though the law required them to pay on 110% of the cost of production. This is not a case where the law is ambiguous leaving it open to different interpretations but is a case of open, defiance of law. Therefore, the intention to evade payment of duty is self evident. Merely because the sister unit will get CENVAT Credit, the appellant cannot NOT PAY full duty in open defiance of the law and take shelter under “Revenue Neutrality” to escape liability. It would have been a different case if the Rule could be read or understood in more than one way and the appellant understood it incorrectly. In such a case, the claim of lack of intention to evade payment of duty could come to their rescue. Extended period of limitation - penalty - HELD THAT:- We do not find even the remotest possibility of reading the words “profit margin” in Rule 8. To say that they will pay duty only on 100% of the cost of production even if the Rule unambiguously says it should be 110% is only a clear violation of the Rule with intent to evade payment of duty even if such intentional evasion may not have ultimately added to the profits of the company. We, therefore find sufficient grounds to invoke extended period of limitation - penalty also upheld. The demand invoking the extended period of limitation along with interest and imposition of penalties are correct and proper and call for no interference - Appeal dismissed - decided against appellant.
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