TMI Blog2003 (1) TMI 621X X X X Extracts X X X X X X X X Extracts X X X X ..... ing demand of differential duty amounting to Rs. 2,87,13,951/- and imposing penalty of Rs. 5,00,000/- on the ground that the applicant company has erred in declaring assessable value for clearance of manufactured items on stock transfer basis under Rule 6(b)(ii) of the Central Excise (Valuation) Rules, 1975 from KGF factory to other manufacturing units in Bangalore and Mysore for captive use in production of excisable final products. 3. The brief facts of this case are that the Central Excise Department has alleged that- (a) the Company is removing parts of Bulldozers and Motor vehicle to the sister units at Bangalore and Mysore on stock transfer basis; (b) while transferring these spares the Company has adopted stock transfer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revising the declared prices in the Annexure. The first proposal is to add the overhead charges which is said to have been not included to arrive at the assessable value and the second proposal is to take 10% of cost of production as notional profit instead of 5% adopted by the assessee. I find that the first proposal is totally unsubstantiated. It is not correct to say that the overhead charges have not been included to arrive at the assessable value without mentioning the basis as to how such an inference has been drawn and without any figures of cost to what extent such overhead charges are not included. On the contrary the assessee s contention in this regard that labour cost includes the overhead charges also, appears to be correct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the true fact was that the overhead costs have been included in the labour cost was not the full overheads, is not sustainable on the facts of the case. In the case of the appellant Company proceedings had been initiated on the basis of the declaration filed by the Company for removal of items on stock transfer basis to other Divisions of the Company for captive use in production of final excisable equipment as far back in January, 1996. The proceedings had been dropped by the jurisdictional Assistant Commissioner by passing orders. The order of the Assistant Commissioner became final in law. (e) The observation of the Commissioner is that the overhead cost purportedly included in the labour cost was not the full overheads and this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required by them. Since the issue relating to administrative and marketing expenses was raised by the Department in the present case through show cause notice, the information required by the Department was furnished by the appellant company. This did not preclude the Department to ascertain this information as soon as the cost breakup was given by the company in 1995-96. Further the Commissioner has not placed any reliance on documentary evidence that this information was not available with the Department when the orders were passed by the jurisdictional Divisional Officer. In fact, while examining the cost breakup of the price the adjudicating authority had come to a conclusion that the said cost would not form part of the assessable valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itation and applicability of larger period. However, we would restrict, the demands within the period of six months from the date of issue of notice. In view of our findings on the question of limitation, quantum of duty is to be re-worked out. Depending on quantum of duty now to be re-determined, the penalty has to be re-determined. 5. The order is therefore set aside and is remanded to the Commissioner to re-work out the demand for within the period of six months and thereafter a penalty, if found justified. 6. In Appeal No. E/235/2001, the same appellant, a PSU, has preferred against the order dated 10-2-2001 demanding differential duty amounting to Rs. 30,00,375/- and imposing penalty of Rs. 3,00,000/- on the plea that the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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