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2016 (12) TMI 1453 - CESTAT MUMBAIValuation - Ethion Technical - clearance of goods to sister concern - captive consumption - duty to be paid in value by considering the cost of production and profit margin as held by Revenue is correct or the duty paid by appellant on transaction value is justified? - whether the assessable value which has been considered by the appellants for the clearances made to their sister concern is correct or otherwise and whether the demand is untenable due to the revenue neutrality of the issue involved or otherwise? - extended period of limitation. Held that: - It is undisputed that the product in question is cleared to their own sister concern and the sister concern is eligible to avail the cenvat credit of the duty paid by the appellant. If that be so, there cannot be any mens-rea attached to the clearances made by the appellants to the sister concern and discharge of duty by adopting a particular assessable value. The law is fairly settled on this issue inasmuch that if the clearances are made to their own sister concern and if other unit is eligible to avail cenvat credit, there cannot be any intent to evade central excise duty - In view of the revenue neutral situation, in the facts and circumstances of this case, it is held that the demand and the interest liability is unsustainable in respect of the product in question Ethion Technical. As regards the penalty imposed by the adjudicating authority, we are of the view that appellant could have entertained a bone fide belief that they have to discharge the duty liability of the goods cleared to their sister concern, on the value of the clearances made to independent buyers - Since the issue is of interpretation, we find that there is no necessity to visit the appellant’s with penalty for the duty liability discharged by them as recorded hereinabove - penalty set aside. Appeal allowed - decided in favor of appellant.
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