TaxTMI 
TaxTMI 
2007 (5) TMI 10
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....blast furnace for the manufacture of hot metal/pig iron mainly to cater to the needs of IIL for hot metal required in the manufacture of H.R. coils by IIL. IMIL had cleared hot metal/pig iron to IIL on payment of duty at an assessable value calculated @ 115% of cost of production in terms of Rule 8 of Central Excise (Valuation) Rules, 2000 by issuing invoices at an estimated price of Rs. 6,500/- P.M.T. and paying differential duty on the revised assessable value. While working out the cost of production, the elements of bank charges and LC commission on raw material, Exchange rate fluctuations, and depreciation etc. were not included. On being pointed out that the above elements were required to be included, IMIL paid differential duty of R....
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....ainst them. The Commissioner's findings on time-barred nature of the demand are contained in Paragraphs 25 and 26 of the impugned order, which are reproduced below :- "25. Similarly in the monthly ERI returns, IMIL have made a declaration in the assessment memorandum at clause (b) as " We have assessed the ad valorem duty on the clearance documents in terms of Section 4 of the Act read with Valuation Rules, 2000 or in terms of Section 4A of the Act." Although, IMIL were aware of clearance of hot metal to IIL under Rule 8 of the Central Excise (Valuation) Rules, 2000 @ 115%, they have mis-declared to the Department that the assessment of duty was as per Section 4 of the Central Excise Act, 1944. Not only this, they have included Section 4A ....
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....Act, 1944. 26. To sum up, I am firmly of the view that IMIL was very much aware of the fact that depreciation of plan and machinery is required to be added to the cost of production but with an intention to evade the payment of C. Ex. duty they did not include the element of depreciation in the cost of production under the guise that it is a trial run production. Thus they have failed to correctly assess the cost of production by not including the element of depreciation of plant and machinery for the calculation of cost of production as required under Rule 8 of the Central Excise (Valuation) Rules, 2000 on the ground that the production is a trial run production which is evident from the statement of cost of production submitted by IMIL i....