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M/s Rajalakshmi Industries Ltd., Shri Gautam Harlalka Versus Commissioner of Central Excise, Thane-II

2016 (7) TMI 347 - CESTAT MUMBAI

Undervaluation by way of not declaring correct value of grey fabrics. - job work - it was noticed that the merchant manufacturers were under valuing the grey fabrics sent to main appellant for processing and the main appellant has discharged the duty liability on the value given by the merchant manufacturers and their processing charges. - Held that:- It is seen in this case that the merchant manufacturer had stated the same value of grey fabrics, and the same was declared by main appellant, can .....

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V. Shetty, Advocate For the Respondent : Shri H. M. Dixit, Assistant Commissioner ( AR ) ORDER Per M. V. Ravindran These two appeals are directed against Order-in-Appeal No. BR/181 to 182/Th-II/2005 dated 16.6.2005 passed by the Commissioner of Central Excise (Appeals), Mumbai-V. 2. The relevant facts that arise for consideration are that the main appellant (M/s Rajalakshmi Industries Ltd.) was alleged to have undervalued the processed fabrics by way of not declaring correct value of grey fabric .....

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during the relevant period. The adjudicating authority after following the due process of law, confirmed the demands raised and also imposed penalty on the main appellant and imposed penalty on the Director of the main appellant. The first appellate authority after granting an opportunity of hearing to the appellant upheld the Order-in-Original. 3. Learned Counsel appearing on behalf of the appellant takes us through the entire case records. It is his submission that both the lower authorities .....

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difference in the valuation but not the fact that there was any under valuation on part of the appellant. He would submit that identical issue was decided by this Tribunal in the case of Madhu Tex Industries Ltd. 2009 (246) ELT 443 (Tri-Mum). He would take us through the relevant paragraph and he would also submit that the Hon'ble Supreme Court in the case of Commissioner of Central Excise Vs. S Kumars Ltd. 2005 (190) ELT 145 (SC) is also on the same issue and price at which the merchant man .....

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t as well as the Director of the company were in the business of processing of fabrics and should have noted value of grey fabrics as declared is very much incorrect and should have asked for the correct value from the merchant manufacturer. 5. On careful consideration of the submissions made by both sides, we find that the issue involved in this case is regarding the demand of Central Excise duty on the processed fabrics cleared by the main appellant. It is the case of the Revenue that the valu .....

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n in respect of the lots which are taken up for processing by adopting therein the cost of the grey fabrics as declared by the merchant manufacturer and the processing charges in order to discharge the Central Excise duty. In the case in hand, there is no dispute that the main appellant had filed the price declaration of grey fabrics as received from merchant manufacturer and in our considered view once the merchant manufacturer declared the price of grey fabrics, on which the processing charges .....

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the fact that the merchant manufacturers have not stated the correct value of grey fabrics. We find that Apex Court in the case of S. Kumars Ltd. (supra) has categorically settled the law that in the case of processing of fabrics, the valuation is to be based on the deemed price comparison of value of fabrics in any of the processors + value of job work. Coming to such a conclusion, the Apex Court relied upon the decision in the case of Ujagar Prints first and second decision. We find that this .....

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ed with the demand of differential duty. Though on merits, the appellants case is squarely covered against them by the Honble Supreme Court decision in the case of Ujagar Prints, 1989 (39) E.L.T. 493 (S.C.), we find that the appellants have made out a case in their favour on the point of limitation. The appellants had filed declarations during the relevant period alongwith the declarations as submitted to them by the merchant-manufacturers/traders. The said declarations were accepted by the au .....

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