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HYDRAULICS PVT. LTD. Versus COMMISSIONER OF C. EX., CHENNAI

2008 (2) TMI 741 - CESTAT, CHENNAI

Demand - Limitation - Valuation - revision in the cost of processed inputs including more elements towards cost of production - HL had cleared inputs got processed by job workers to its sister units and subsidiary RAPSHL - E/597/2003 - 231/2008 - Dated:- 29-2-2008 - S/Shri P.G. Chacko, P. Karthikeyan, JJ. REPRESENTED BY : Shri K. Mani, Consultant, for the Appellant. Smt. R. Bhagyadevi, SDR, for the Respondent. [Order per : P. Karthikeyan, Member (J)]. - The captioned appeal filed by M/s. Hydraul .....

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charges of the job worker as the value. A show cause notice was issued initially on 27-7-01 and an addendum issued on 2-1-02. In the addendum demand was enhanced revising the cost of processed inputs including more elements towards cost of production. The impugned order confirmed a demand of Rs. 65,47,756/- on removals of processed inputs under Section 11A , Rs. 494588/- on removals of capital goods under Section 11A read with Rule 57-I of Central Excise Rules 1944 (CER), demanded appropriate in .....

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he Commissioner invoked extended period on this ground of suppression. However, as rightly pointed out by HL, it did not stand to gain anything by undervaluing clearances to its sister units as whatever duty it paid was available to it as Modvat/Cenvat credit. For removals to sister units, extended period cannot be invoked to demand differential duty as held by the following judicial authorities. 1. Sterlite Industries (India) Ltd. v. CCE - 2005 (192) E.L.T. 852 (Tri.-Mum.) 2. Jay Uhshin v. CCE .....

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ced on record correspondence in this regard. Moreover, assessee appears to have entertained a genuine belief that Ujagar Prints formula of valuation applied in the situation. Goods removed were job worked inputs. HL did not do any manufacturing activity. Therefore the valuation applicable to manufacture by job worker applied. Even in 2001, the department was uncertain about the method of valuation to be adopted and an addendum to the demand notice was issued in 2002. Therefore, the argument of t .....

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s 1975. The related provisions of the Act and Valuation Rules are reproduced below : 4. Valuation of Excisable goods for purposes of charging of duty of excise :- ………………………………………………………………………...……………... ………………………&h .....

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istributor of the assessee, or a sub-distributor of such distributor; or iv. they are so associated that they have interest, directly or indirectly, in the business of each other. Central Excise Valuation Rules, 2000 RULE 8. Where the excisable goods are not sold by the assessee but are used for consumption by him or on his behalf in the production or manufacture of other articles, the value shall be [one hundred and ten per cent) of the cost of production or manufacture of such goods. RULE 9. W .....

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son), who sells such goods in retail : Provided that in a case where the related person does not sell the goods but uses or consumes such goods in the production or manufacture of articles, the value shall be determined in the manner specified in rule 8. RULE 10. When the assessee so arranges that the excisable goods are not sold by him except to or through an inter-connected undertaking, the value of goods shall be determined in the following manner, namely :- (a) If the undertakings are s .....

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