9911796707
TMI Blog1997 (6) TMI 147X X X X Extracts X X X X X X X X Extracts X X X X ..... price lists and making clearances on payment of duty on the approved prices. Ammonia compressors are parts of refrigeration and air-conditioning equipment. Appellant was also availing benefit of the SSI Notification 80/80. The dispute in this case relates to the period 1981-82 to 1984-85. By Notification 80/62 the aforesaid accessories were fully exempt from payment of duty but the notification did not apply to compressors. In other words, appellant had to pay duty on compressors and was not required to pay duty on the accessories. 3. Central Excise Preventive staff found on verification that appellant was undervaluing compressors in order to pay less duty by shifting a part of the value of compressors to accessories which were exempt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces actually charged by the appellant and the prices charged by appellant for fittings and accessories was very much higher than the prices charged by the competitors. The department had worked out the correct value of fittings and accessories allegedly on the basis of prices charged by competitors enquired for different sizes of ammonia compressors. The show cause notice also alleged that going by the appellant's prices for the parts, the total value of all the components of ammonia compressor was much higher than the prices declared by the appellant for ammonia compressor. These are the main reasons which prompted the department to issue show cause notice alleging allegation and the shifting of value of compressors and evasion of duty. 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e period in question before the Joint Director. It appears that representatives of the Federation of Engineering Industry of India met the adjudicating authority and stated that as a small scale manufacturer faced difficulties in the maintenance of detailed records over the past many years. It was apparently agreed by the adjudicating authority and those representatives that the study by the Adviser (Cost) under the Joint Director could be made on the basis of current records and records of the past one or two years which were available with the appellant. Apparently the costing data so prepared by Advisor (Cost) showed that the prices of compressors declared by the appellant were much below the cost price as estimated. 6. In the impu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se notice. Show cause notice was based on the allegation of additional consideration as contemplated under Rule 5 of the Central Excise (Valuation) Rules but final order has been passed on the basis of Rule 7 read with Rule 6(b)(ii) of the Valuation Rules. The question is if there is a valid reason regarding the value of Rule 5 declared by the appellant. Show cause notice urged two reasons for rejecting Section 4(1)(a) value. One was based on the allegation of arriving at the value of ammonia compressor by deducting the competitors' price for fittings and accessories from the price charged by the appellant for ammonia compressors, fittings and accessories and treating the difference as representing the correct value of ammonia compressors. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the 5 years the Advisor (Cost) arrived at the identical average price. This certainly would ignore the rising cost of raw materials, of labour cost and other elements forming part of the cost during the period from 1980-81 to 1984-85; it is not shown that Advisor (Cost) had given any margin on this account. It is unlikely that he had given any margin since he went by the average. This is sufficient reason not to act on the costing data prepared by the Advisor (Cost). 9. What we have indicated above, will be sufficient to show that there was no justification to reject the value of ammonia compressor declared by the appellant during the period in question or to follow the costing data prepared by the Advisor (Cost). Therefore, the dema ..... X X X X Extracts X X X X X X X X Extracts X X X X
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