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2015 (12) TMI 731 - CESTAT AHMEDABAD

2015 (12) TMI 731 - CESTAT AHMEDABAD - TMI - Duty demand - undervaluation of the goods - appellants paid the duty on their own calculation and they have not followed the provisions of Rule 8 of Central Excise valuation (Determination of Price of Excisable Goods) Rule 2000 and CAS-4 in respect to clearance of the goods to their sister unit during the period from December 2001 to March 2006 - Held that:- Larger Bench of the Tribunal in the case of M/s Ispat Industries Ltd (2007 (2) TMI 5 - CESTAT, .....

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where both the Rules are applicable, the application of Rule 4 will be allowed to determine value which will be more consistent and in accordance with the parent statutory provisions of Section 4 of the Central Excise Act 1944. In the present case, there is no dispute that during the period 2003-04 to 2005-06 the appellant transferred the goods to their sister unit as well as to the independent buyers

Demand of duty alongwith interest for the period 2003-04 to 2005-06 is set aside. .....

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oner : Shri Deepak Kumar, Consultant For the Respondent : Shri S K Shukla, Authorised Representative ORDER Per : Mr.P.K. Das, The relevant facts of the case, in brief, are that the appellants were engaged in the manufacture of Ortho Nitrate Anisole (ONA) classifiable under Chapter 29 of the Schedule to the Central Excise Tariff Act 1985. A show cause notice dtd 14.1.2006 was issued proposing demand of duty alongwith interest and to impose penalty on the ground of undervaluation of the goods. It .....

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behalf of the appellant submits that during the period 2001-02 and 2002-03, they had not any independent sale and therefore, they are liable to pay duty under Rule 8 of the Valuation Rule 2000 read with CAS-4. He further submits that the remaining periods i.e., 2003-04 to 2005-06 there was sale of independent buyer to the extent 3% in 2003-03 and 30% in respect of the other two years. He relied upon the decision of the Larger Bench in the case of M/s Ispat Industries Ltd Vs CCE Raighad - 2007.20 .....

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14.308.ELT.495 (Tri.Ahmd) b) Daman Ganga Board Mills Pvt Ltd vs CCE, Vapi -2012.276.ELT.532 (Tri.Ahmd) c) Subray Catal Chemical P Ltd vs CCE, Vapi - 2010.261.ELT.1170 (Tri.Ahmd) d) Jai Corporation vs CCE&ST, Daman- 2015.317.ELT.353 (Tri.Ahmd) e) Ultratech Cement Pvt Ltd vs CCE, Bhavnagar - 2013.295.ELT.470.(Tri.Ahmd) f) Ultratech Cement Pvt Ltd vs CCE, Bhavnagar - 2014.302.ELT.334.(Guj) g) Gangotri Electrocasting Ltd vs CCE&ST Patna - 2013.293.ELT.395 (Tri.Kolkata) h) Ferro Alloys Corpn .....

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. After hearing both the sides and on perusal of the records, we find that the Larger Bench of the Tribunal in the case of M/s Ispat Industries Ltd (supra) held that transfer part of production to another plant of same assessee and balance production sold to independent buyers, Rule 8 could not be applicable and value could be determined by the assessee under Rule 4 of the Valuation i.e., transaction value. It has been held that the provision of Rule 4 are in any case to be preferred over the pr .....

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eir sister unit as well as to the independent buyers. The Learned Authorised Representative submitted that in 2003-04 there was sale of 3% to the independent buyer. The Hon ble Supreme Court in the case of M/s A K Roy and Another (supra) held as under : 20.Excise is a tax on the production and manufacture of goods see Union of India v. Delhi Cloth and General Mills (AIR 1963 SC 791) section 4 of the Act therefore provides that the real value should be found after deducting the selling cost and s .....

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lesale price which gives credit to the wholesale buyer for a period of time and that the price has to be fixed for delivery at the factory gate thereby eliminating freight, octroi and other charges involved in the transport of the articles. As already stated it is not necessary for attracting the operation of s. 4 (a) that there should be a large number of wholesale sales. The quantum of goods sold by a manufacturer on wholesale basis is entirely irrelevant. There are facts that such sales may b .....

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