TMI Blog2007 (2) TMI 139X X X X Extracts X X X X X X X X Extracts X X X X ..... 2000 Feb'85 to April'95 Rs. 38,08,221 05 V(72 73)15-23/Off/Commr/99/ Adj / 1060, dated 29-5-2000 May'95 to Jun.'98 Rs. 5,80,80,162 06 IV (72) 6-20/96/P/1665 dated, 5-3-1999 July'98 to Nov.'98 Rs. 1,28,03,804 07 IV (72) 6-20/96/P/4947 dated, 25-6-1999 Dec.'98 to Mar.'99 Rs. 96,35,164 08 IV (72) 6-20/99/P/8297 dated, 17-11-1999 April'99 to Aug.'99 Rs. 1,20,49,933 09 IV (72) 6-20/96/P/2476 dated, 25-4-2000 Sep.'99 to Dec.'99 Rs. 90,09,461 10 IV (72) 6-20/96/P/1074 dated, 5-3-2001 Jan.'2000 to Mar.'2000 Rs. 78,07,918 11 V(Ch 72) 15-128/R-II/Bhi-I/Sec-11A dated, 31-5-2001 Apr.'2000 to May'2000 Rs. 74,47,066 12 V(Ch 72) 15-93/R-III/Bhi-I/Sec-11A/2000Adj., dated, 31-5-2001 June'2000 to Aug.'2000 Rs. 97,66,031 TOTAL. . . Rs. 14,49,85,555 2. The first five of the aforesaid SCNs were issued by Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty of Rs. 6,52,51,251/- under Section 11AC of the Act and Rs. 50 lakhs under Rule 173Q of the erstwhile Central Excise Rules, 1944. The applicant preferred an appeal against the said Order-in-Original before CESTAT New Delhi who vide Final Order No. 291/05-N.B.-A, dated 4-3-2005 [2006 (197) E.L.T. 113 (Tri.)] did not agree with the assessee's contention for valuation under Rule 5 of the Valuation Rules. The Tribunal also rejected the Department's view of invoking Rule 6(b)(i) because the said Rule applied where the excisable goods were not sold by the assessee but were use consumed by him or on his behalf in production or manufacture of other-articles. In the present case, the goods were neither consumed by the applicant nor were used in production of manufacture of other articles on behalf of the applicant. Accordingly, the Tribunal set aside Order-in-Original and remanded back the case to Commissioner for re-determination of the assessable value of the scrap in dispute under Rule 7 of the Valuation Rules and re-adjudicate the matter only with reference to the value and consequential amount of duty liable to be paid by the applicant and also to re-determine the penalty on the appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , by loading into our trucks/trolley and unloading at specified place of BSP. No other additional charges will be paid by BSP to us for such activities." The slag cleared form the Slag Heap is having Iron content, no doubt, but with various impurities. As the impurities are less in a "lobe", the same are not part of the sale tender and have to be returned to the applicant at the cost of Rs. 150/- per MT. On the other hand, the Skull Scrap is an entirely different product arising form the breaking of ladles which are no longer usable. Therefore the letter category of Skull Scrap has far lesser impurities and fetches a better price. The applicant was paying duty on the cleared from the Slag Heap based upon the tendertedly, there was a cost of segregation involved which was borne by the buyer which was not being included in the assessable value. The applicant in the present proceedings admits inclusion of the cost of this segregation in the value of the finished product and on that basis admits a duty amount of Rs. 2,57,90,137/- for the period March, 1994 to August, 2000. The said amount also stands deposited on 10-8-2006. After the segregation of the transportable sizes of boulders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ify as to under which Valuation Principle/Rules it is arriving at the assessable value in view of the CESTAT's Remand Order dated 4-3-2005, 2006 (197) E.L.T. 113 (Tri. Del.) (supra). This clarification was necessary in view of the fact that the said order of CESTAT rules out application of Section 4(1)(a) of the Act, Rule 5 of the Valuation Rules, 1975, and Rule 6(b)(i) (ibid) and goes on to remand the matter back to the Commissioner for re-determination of the assessable value of the scrap in dispute under Rule 7 of Valuation Rules and adjudicate the matter only with reference to the value and consequential amount of duty liable to be paid by the party and also to re-determine the penalty on the party. 8.2 The ld. Advocate clarified that it is necessary to read down Rule 7, as re-produced below :- "If the value of excisable goods cannot be determined under the foregoing rules, the proper officers shall determine the value of such goods according to the best of his judgment, and for this purpose he may have regard among other things, to any one or more of the methods provided for in the foregoing rules." Thus, once Rule 7 is to be applied, the entire valuation has been thro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are also commensurate to the provisions of other rules namely 4, 5 and 6 of the Valuation Rules. To take an example, during the period July, 1994, M/s. Bhilai Steel Plant have cleared the said goods i.e. CI. Skull Scrap of slag dump yard otter assessing it to duty at a valve of Rs. 2066.% PMT whereas the buyer M/s. AMR Associates have sold the same at Rs. 3250 PMT to other parties such as M/s. Nagpur Alloys Castings Ltd. M/s. Nagpur Engineering Co. Ltd., who in turn sold the same goods at an ultimate price of Rs. 5750 PMT which has inclusive of all taxes, which after allowing 10% profit margin at two stag works out to Rs. 4982.40 PMT. At the same time, M/s. Bhilai Steel Plant have cleared the C.I. Skull Scrap of ladle breaking yard at an assessable value of Rs. 4100 PMT and cum duty price duty of Rs. 4510 PMT. Thus, there is a difference of Rs. 472 in the two prices which have after adjusting the freight and local taxes would not be set of and the market price of the scrap of slag dump yard sold to AMR Associates would still be a little higher than the price of scrap of ladle breaking yard sold by M/s. Bhilai Steel Plant: The relevant Show Cause Notice for the said period has adop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulding it, is brought diligently to the notice of the tribunal, it cannot be blink at it or be blind to events which stultify or render inept the decretal remedy. Equity justifies bending the rules of procedure, where no specific provision or airplay is violated, with a view to promote substantial justice We affirm the proposition that for making the right or remedy claimed by the party just meaningful as also legally and factually in accord with the current realities, the court case, and in many cases must, take cautious cognizance of events and developments subsequent to the institution of the proceeding provided the rules of fairness to both sides are scrupulously obeyed." 10.2 The said decision relies on a similar ratio laid down by the Apex Court in Dilip Kumar Sharma Others v. State of Madhya Pradesh - (1976) 1 Supreme Court cases. 10.3 Therefore, Revenue cannot blow hot and cold. 11. The Bench has gone through the case records and heard both sides. The basic issue involved here is one of Central Excise valuation and the question for consideration is a to whether valuation of Slag cleared from Slag Heaps should be - (a) based upon the tender sale price ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecome so heavily encrusted with molten iron that they are no longer usable arid have to be broken resulting in Skull Scrap. While Skull Scrap contains very high quantities of iron, the slag contains only small quantities of iron. Further, from the tender conditions, it is also noticed that in view of Para 3.5 of tender, steel scrap of full pieces of Pig Iron of 1 'lobe' and above, recovered during the process of segregation, cannot be removed and have to be surrendered to the applicant. Further, the applicant has stated that separate independent tenders to independent parties are also invited for the two products establishing the fact that they are separate products and not comparable. This Revenue has not refuted. It is also brought on record that post-August, 2000 to date, Revenue has been assessing the value of the Slag in question not on the basis of the value of Skull Scrap but on the basis of the value arrived at by taking into consideration the tender price + the cost of segregation. Thus, for a period of 6½ years. Revenue has accepted this valuation principle and has not raised any demands; but for some strange reason it is not willing to extend this for the period of deman ..... X X X X Extracts X X X X X X X X Extracts X X X X
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