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2019 (3) TMI 666 - AT - Central ExciseCompounded Levy Scheme - processed textile fabrics - Section 3A of the Central Excise Act, 1944 - Appellant claimed that it was an independent textile processor and applied for compounded levy scheme (CLS) as per Rules 96ZNA to 96ZND of erstwhile CER, 1944 and Notification No.32/2001 – CE (NT) dated 30.04.2001 - Held that:- Rule 96ZNA prescribes certain criteria for filing the application whereas, 96ZNB prescribes conditions for availing of special procedure. Hence, in the background of our findings that here in the case on hand and the facts of this case, the appellant has not got through in its first hurdle as far as threshold investment limit is concerned, thus the mere application filed under 96ZNA per se will not confer any benefit, much less of the kind sought for by the appellant herein. Valuation of fabrics cleared on job work basis to M/s. Jansons Industries Ltd. - Held that:- What cannot be dispute is that the appellant was only doing a job work on materials provided by their principals. In this regard, there are merits in the contention of the appellants that in such cases, the method of valuation laid down in M/s. Ujagar Prints Ltd. [1989 (1) TMI 124 - SUPREME COURT OF INDIA] and reiterated in M/s. Pawan Biscuits Co. (Pvt.) Ltd. Vs. Collector of Central Excise, Patna [2000 (7) TMI 78 - SUPREME COURT OF INDIA] will necessarily have to be followed, in which case, the value to be adopted will be restricted to the material cost of job work charges. There cannot then be any question of adding the profit of the principals. Valuation - processed goods sent via appellant to M/s. Jansons Exports - the appellants have contended that no findings have been given by the adjudicating authority with regard to the detailed submissions made on this aspect by the appellant in their reply to the Notice. It is also brought out that in the reply to the Show Cause Notice, they had submitted a revised quantification of demand, as per which the duty payable is only ₹ 68,65,550/- - Held that:- There is a definite case for re-consideration of the quantum of demand in this case - The matter is therefore remanded to the adjudicating authority. Penalty - Held that:- No suppression can be assailed against the appellant - the penalty of ₹ 2,17,05,582/- under Section 11AC of the Central Excise Act, 1944 and Rule 173Q of the erstwhile Central Excise Rules, 1944 read with Section 38A of the Act ibid cannot be sustained and is therefore set aside. Appeal allowed in part and part matter on remand.
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