TMI Blog2013 (12) TMI 451X X X X Extracts X X X X X X X X Extracts X X X X ..... e only takes into account the wastage of yarn in processing but does not take into account weight gain in processing due to dipping of the fabric in resorcinol formaldehyde latex solution - There is also a moisture regain factor mentioned - Such factors are seen to be taken into account in a few material reconciliation statements given to the parties concerned and forming part of annexures to SCN - the cost construction of Revenue is half baked - Neither there was desired clarity on method of costing to be adopted – thus, suppression with intention to evade payment of duty cannot be held against the appellant - this is not a case where extended period of time could be invoked for demanding duty short paid – Decided in favour of Assessee. - E/1250/2004 - Final Order No. 40287/2013 - Dated:- 1-5-2013 - P K Das And Mathew John, JJ. For the Appellant : Shri K S Venkatagiri, Adv. For the Respondent : Ms Indira Sisupal, DC (AR) PER : Mathew John This is a matter in second round of litigation before Tribunal. The issue involved is differential duty demanded on dipped nylon/polyester fabrics manufactured by the appellant on job-work basis on account of valuation dispute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of one company, that is M/s Andrew Yule and Company, Revenue is also relying on a declaration dated 28-10-87 of the cost of the material from that company. 4. Basically there is a presumption in the show cause notice that the customers who gave job-wok to the appellant also incurred expenditure towards opening of letter of credit, to-bond charges, de-bond charges and C F charges, without necessary proof of such expenditure incurred by each of the supplier of raw material. 5. The facts based on which case is made out in the SCN dated 09-11-1998 against the appellant is stated in para 12.3 through reproduction of a statement of Shri. R. Ravi Product Manager. The appellant had worked out the cost of material received based on CIF value up to the port of import, customs duty and transportation cost from the port of import to the factory of the appellant along with a buffer cost of 1% to 5%, towards variation in exchange rate calculations, at different periods of time to ensure that the cost declared is not less than the actual cost that may be incurred. But they did not include various other elements like such as C F charges, handling charges, insurance, L. C. Charges etc in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in 1995 (75) ELT 721, the Hon'ble Supreme Court held that in order to invoke the longer period, there must be evidence to show that with an intent to evade duty the appellant willfully suppressed certain facts or willfully mis-declared certain facts. Such a finding based on certain materials should be entered into by the adjudicating authority, which is not done in this case. It could be done with respect to each job work of consignment covered by these demands, that could be done with reference to the annexures to the show cause notice, which are not before us. 10. In the above circumstances, we set aside the impugned order and remand the matter to the adjudicating authority to enter a finding in this regard, after making the appellant known about the facts on which he is relying and after granting a personal hearing to the appellants in this behalf." 7. Consequent to the order of the Tribunal, the matter has been re-adjudicated confirming demands for Rs. 3,51,425/- in respect of demand made vide SCN dated 09-11-88 plus Rs.4,16,882.36 in respect of SCN dated 19/11/88. This order examines the issue whether there has been any suppression of facts and not the issue of valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12. Opposing the arguments the Ld A. R. for Revenue first pointed out that M/s Andrew Yule and Company vide their letter dated 28-10-87 addressed to the appellant declared the landed cost of yarn as Rs. 107.38 per Kg whereas the appellant declared the value as 106.60 per Kg for paying duty, thus clearly proving the mis-declaration. Further she argued that the appellant had been procuring raw materials of the same nature for their own manufacturing processes. So they were aware of the usual expenses that were being incurred on import of raw material and its transportation to their factory. The appellants had not included cost elements which they normally incurred while procuring raw materials while declaring the cost of raw materials used for manufacture of final products on job work. In this matter the appellants cannot claim ignorance. 13. In the case of wastage of raw materials the Ld. A. R. submitted that there were agreements with M/s Shri Ram Fibres and M/s Nirlon Synthetics to the effect that 6% to 7% of yarn will be get wasted in manufacturing process. The Ld. A.R drew attention to para 13.2 of the adjudication order which mentions letter dated 28-09-85 addressed to M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were available. Either step was not taken. This has substantially weakened the case of Revenue in this second round of litigation. 17. Now we propose to examine the issue on merits. In the matter of L. C. opening charges, to-bond charges and de-bond charges is mostly on notional basis, though some Bills showing incurring of C F charges and loading and unloading charges incurred by M/s Andrew Yule and Company are produced by Revenue. But there is no means to co-relate these with the prices declared by M/s Andrew Yule and Company. Further we note that the appellant themselves had provided a buffer of additional cost element 1% to 5%, albeit to take into account cost variations on account of exchange rate variation. The SCN or adjudication does not examine the issue as to what extent such buffer already provided did not offset under declaration of value due to any element, if any not included. We consider it not appropriate to allege suppression on the ground that they did not include such costs to the materials supplied by others based on similar charges incurred by appellant. 18. In the case of wastages also the calculation is not very clear in as much as the calculation of Reve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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