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2021 (11) TMI 462 - AT - Central ExciseValuation - Job-worked goods - governed by Rule 8 of Central Excise (Valuation) Rules, 2000 or on cost construction method i.e. cost of raw material plus job charges? - suppression of fact or malafide intention in non-payment/short-payment of duty on the job work goods on the part of the appellant, or not - HELD THAT:- The value of the goods shall be done under Rule 8 only in case if the said goods is either used by the assessee himself or on his behalf in the manufacture of other articles. In the present case, job-worked goods manufactured by M/s. Turbhe Chemical Pvt. Ltd. was neither used by themselves nor on their behalf in the manufacture of any other articles. Admittedly, the job-worked goods after manufacture was returned back to principal manufacturer M/s. Total Oil India Pvt. Ltd. and it is M/s. Total Oil India Pvt. Ltd., who have used the job-worked goods in the manufacture of their final products and such manufactured goods cleared on payment of duty. Therefore, the ingredients of Rule 8 are not satisfied on the part of the appellant, therefore, valuation of job work goods cannot be done under Rule 8. Whether there is suppression of fact with malafide intention for non-payment/short-payment of duty? - revenue neutrality - HELD THAT:- The appellant have been paying the excise duty. The only lapse is that the appellant have not revised the price after 2006, however on pointing out by the audit they have paid the duty along with interest. It was also found that the duty so paid/payable by the appellant is undisputedly available as Cenvat Credit to the principal manufacturer M/s. Total Oil India Pvt. Ltd. Therefore, it is a clear case of revenue neutral. In catena of case law including the case laws cited by the learned Counsel, it was held that where there is situation of revenue neutrality the malafide intention cannot be attributed to the assessee. For this reason also, we find that there is no suppression of fact or malafide intention on the part of the appellant. However, the appellant have admittedly paid the duty however the duty paid is not disputed by the appellant. The excise duty payable on the value i.e. cost of manufacture plus job-work charges is correctly payable by the appellant. The adjudicating authority should re-determine the value accordingly. Consequently, the correct excise duty payable and interest thereon should be recomputed - there is no malafide intention on the part of the appellant, hence the penalty is set aside. Both the matters are disposed of by way of remand to the adjudicating authority for passing a fresh order.
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