9911796707
TMI Blog2007 (10) TMI 508X X X X Extracts X X X X X X X X Extracts X X X X ..... ndustrial chemicals. They opened another unit No. 2 in Navi Mumbai in 1994 which was the bigger unit having 32 to 40 workers. During scrutiny of the records, it was noticed that they were repacking and relabelling certain goods falling under chapters 39 and 38 and their activity of repacking and relabelling amount to manufacture in respect of certain goods falling under chapters 29 and 38. They were availing credit in respect of goods which were repacked and relabelled by them. After repacking and relabelling, the goods were cleared by them to their unit by paying duty on the value at which the goods were initially purchased by them before repacking and relabelling. Since the activity undertaken by them amounted to manufacture, they were re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etermined their cost of production and profit on the basis of balance sheet supplied by them for the year ending 31st March, 2000-2001. On 16-1-2003, the jurisdictional Superintendent issued a letter to them asking to produce Cost Accountant's Certificate for their product for the period 2000 to 2002 and they replied vide their letter dated 10-2-2003 stating that they may be able to give the details as worked out by their accountant and the department may verify the same at their end. However, Revenue kept on asking for the Cost Accountant's Certificate which they being small unit could not give. New Valuation Rules were notified in 2000 but there was no clarity on the same and they were unable to understand as to what procedure should be f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 007 (212) E.L.T. A-151 (S.C.) wherein "The Tribunal in its order had held that non filing of declaration under Rule 173C of erstwhile Central Excise Rules was not with any intention to evade duty as revenue neutrality was established in the case. There was transfer of goods from one unit to another. Even if valuation was adopted on lower side at the time of clearance from Dankuni factory, it does not lead to any gain to comply. Hence demand for longer period of limitation and penalty was side." Similar decision was in the case of Indian Telephone Industries Ltd. v. CCE, Calicut - 2006 (201) E.L.T. 419 (Tri.-Bang.) 3. The learned SDR however submits that the appellants have not disclosed their activity of transferring the goods to thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04 and even Chartered Accountant's certificate, they submitted in the February, 2004 did not disclose overheads in respect of the items repacked and relabelled by them but were of some other items. Though they are disputing the duty on merits they still have not suggested any value at which the duty can be worked out. In view of this, they suppressed the fact of captive consumption of goods, and therefore extended period has rightly been invoked. 4. As regards revenue neutrality, attention was invited to the decision of the Supreme Court in the case of CCE, Mumbai v. Mahindra & Mahindra Ltd.-2005 (179) E.L.T. 21 (S.C.) wherein it was held that availability of Modvat credit to an assessee by itself not conclusive or decisive though it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of production. Even letter dated 13-9-2002 is misleading as it says "These repacked and relabelled goods are also available for sale to other customers from Unit No.1" even though there is not a single instance from 1999 till 2003. We note that the department was prompt in reply by their letter dated 23-9-2002 and has been frequently asking them to produce the Cost Accountant's certificate which they never did. If it was the matter of revenue neutrality nothing prevented them from giving Cost Accountant's certificate instead disputing the cost of production arrived at by the Revenue once full set off duty was available to them. They have not filed any declaration under Rule 173C even though in case of goods solely used for captive consumpti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y unit No. 2 which fact also has not been disclosed to department. If they were small unit why were they unnecessarily undertaking any repacking and relabelling of the goods when the goods could have been transferred in bulk to their sister unit without undertaking any repacking and relabelling. In view of this, we do not find their conduct to be clean and therefore revenue neutrality cannot be advanced to support their claim of bona fide as held by the Apex Court in various decisions cited by the learned SDR. In view of this, we hold that extended period has been rightly invoked. In view of this, we find no merit in the appeal and accordingly reject the same.
(Pronounced in the court on 17-10-2007) X X X X Extracts X X X X X X X X Extracts X X X X
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