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2022 (4) TMI 603 - CESTAT AHMEDABADValuation - clearance of entire stock transfer of Ethyl Alchohol to Appellant’s Sister Unit - inclusion of margin of profit in the cost of production or not - any under valuation resulting in a short payment of duty or otherwise? - period from November 1997 to March 2000 - invocation of extended period of limitation - Revenue Neutrality - HELD THAT:- It is found that whether assessable value for clearance of “Ethyl Alcohol” was inclusive of profit or not can decide the entire issue on merits of the case. When revenue is making such an allegation, the burden is on revenue only to establish this factor with sufficient evidences. Revenue has only assumed that the element of profit was not included in the assessable value, without producing any evidence in support of their allegation. The cost of production and element of profit depends on various factors prevailing in the market from time to time. Revenue has assumed and adopted cost of production ₹ 17 per Ltr for the entire period in question without showing how and which data they have relied upon to formulate such value and the charges of under valuation framed against Appellant. Certificate submitted from Chartered Accountant shows that element of profit was included in assessable value in clearance of “Ethyl Alcohol” to Appellant’s sister unit. Certificate of Chartered Accountant could not be brushed aside, without any other reliable contra evidence. Thus, Revenue has not adduced any positive, clinching, sufficient evidence to prove case on merits in facts of this case. Extended Period of limitation - Revenue Neutrality - HELD THAT:- It is a settled legal position that Revenue cannot invoke larger period of limitation in cases involving Revenue Neutral Situation, because an assessee would not have any intent to evade payment of duty in a Revenue Neutral situation. Appellant has discharged substantial excise duty liabilities on its final product from PLA during relevant period. Cenvat of amount of duty under dispute could have been utilized by the Appellant - Show Cause Notice and demand against an assessee would not be justified, if assessee himself was entitled to avail Cenvat credit of disputed duty demanded when assessee is in a position to utilize Cenvat credit for payment of duty on clearance of their final products. The issue involved is also of pure interpretation of provisions of levy of duty including profit in assessable value in clearance of goods to sister unit for captive use. In such facts of case, it cannot be said that the Appellant had any mala fide intentions to evade payment of duty, which otherwise was available to Appellant as Cenvat Credit in sister unit and that Appellant have not suppressed assessable value with intention to evade payment of duty. There is nothing on record to show that suppression of facts or wilful misstatement were made by Appellant to evade payment of excise duty - charge of suppression or willful misstatement with intention to evade payment of duty cannot be sustained against the Appellant. Hence extended period for demand cannot be invoked. No mala fides can be attributed to Appellant for such issue of interpretation and hence extended period of time limitation is not invocable in the facts of this case. Appeal allowed - decided in favor of appellant.
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