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2023 (12) TMI 473 - AT - Central Excise100% EOU - clearance of bulk drugs made in DTA under Advance Release Order (ARO) - goods cleared to own DTA and its subsidiaries on payment of Excise duty - 110% of the cost of production in terms of Rule 8 of Central Excise Valuation Rules, 2000 - case of the department is that the method opted by the appellant is not correct and legal and according to the department the valuation of the goods cleared in DTA should be done in terms of Rule 3 (3)(b),4 and Rule 8 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - extended period of limitation - revenue neutrality. HELD THAT:- In the present case, taking the case of bulk drug- PHH it is admitted fact that among various sale price to unrelated parties the lowest price is Rs. 9,050/- per Kg, and similar facts in other identical drugs. Therefore, as per the unambiguous statutory provision in terms of Rule 4(3) reproduced above only the lowest of such values of the identical goods shall be taken to determine the value of goods cleared to the related party. Therefore, since the appellant have cleared their bulk drugs to their related parties undisputedly at a lower price than the price adopted by department, clearly establish that there is no reason to disturb the value of goods to determine the value of the goods cleared by the appellant to their related person. In view of the decision in Autoline India Ltd. [2015 (4) TMI 772 - CESTAT NEW DELHI], it is settled that even in case of clearance of identical goods by an EOU to a related party the value of imported identical goods has to be applied, in absence of the same the method adopted by the revenue by applying the same price of the goods sold in India by EOU is incorrect and illegal. Thus, in cases where the goods is cleared to related DTA parties which is identical to the goods sold to the unrelated party, the value adopted by the appellant is correct and legal and on the basis of price of goods cleared to unrelated DTA parties demand of differential duty is incorrect and illegal. The revenue was supposed to find out the value of identical goods imported into India and if at all it is found that the price declared by the appellant is lower than the price of imported goods than price of identical imported goods could have been applied. However, in the present case the Adjudicating Authority straight away jumped to Rule 8 without making any effort to determine the value in terms of Rule 4 to 7 of Customs Valuation Rules. Therefore, the valuation determined by the department under Rule 8 cannot be accepted. As discussed above, since the department has not brought the value of identical imported goods. in the present case also the value declared by the appellant cannot be disturbed. Extended period of limitation - revenue neutrality - HELD THAT:- It cannot be said that the appellant have suppressed any fact from the department with intent to evade payment of duty. It is further observed that since the supplies made under ARO and in other cases the Cenvat credit was available in respect of CVD/SAD portion to the recipient of goods, the entire issue was of revenue neutral. Therefore, for this reason also no mala fide intention can be attributed to the appellant for short payment of duty, if any. Therefore, there are no doubt in mind that looking to the facts of this case the appellant have not suppressed from or mis-declared the information to the department with intent to evade payment of duty. Accordingly, the extended period is not available in the present case. The demand of excise duty in the present case is not sustainable - the impugned orders are liable to be set aside - Appeal allowed.
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