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2017 (1) TMI 491 - CESTAT NEW DELHI

2017 (1) TMI 491 - CESTAT NEW DELHI - TMI - Valuation - Rule 6(b)(i) of the Central Excise (Valuation) Rules, 1975 or Rule 6(b)(ii) - price is not the sole consideration - allocation of expenses and inclusion of notional profit margin of 10% - processing of grey fabric - Held that: - during the relevant period, there was no statutory requirement or Board s guidelines regarding submission of CAS-4 Certificate. The standards were incorporated through the Circular dated 13.02.2003 of the Board for .....

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nsurance, commission, etc. again based on the said Balance Sheet. We find such exercise to arrive at assessable value for the impugned period is without any legal basis and arbitrary - valuation adopted and relied upon M/s. SKL is correct and in terms of law. - Further, the issue which has attained finality in remand proceedings, cannot be reopened. - Appeal partly allowed - partly decided in favor of appellant. - Excise Appeal No. 43, 1775 -1776 of 2007, Excise Misc. Application No. 514 .....

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uous. 2. Both sides are in appeal before us. M/s S Kumar Ltd. (SKL) is a processor of grey fabrics and paying duty on the finished goods. As grey fabrics is exempted from duty, therefore, M/s. SKL who is engaged in the manufacture of man-made grey fabrics and M/s. S Kumar Synfab Ltd. (SKS) is merchant manufacture who supplied the man made grey fabrics and get the same processed from M/s. SKL. The dispute arose regarding the valuation of processed grey fabrics for payment of Central Excise duty. .....

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missioner (Appeals) who held that there is no requirement of inclusion of notional profit margin of 10% and dropped the demand against M/s SKL . The said order was challenged by M/s. SKL before this Tribunal and this Tribunal remanded the matter back to the learned Commissioner for denovo adjudication, but this Tribunal set aside the penalty imposed upon M/s. SKS. In remand proceedings, the adjudicating authority again dropped the demand on account of notional profit margin of 10% of grey fabric .....

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by which he has dropped the demand on account of non inclusion of notional profit margin of 10%, was not challenged by the Revenue in earlier round of litigation, therefore the said order has attained finality and cannot be agitated in denovo proceedings. He, further submits that in the earlier round of litigation, the penalty on M/s. SKS was dropped by the Tribunal and the said order was not challenged by the Revenue. Therefore, the said order has attained finality. Therefore, penalty on M/s. S .....

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pinning mills as also the market to various weavers for conversion into grey fabrics on payment of conversion charges. Similarly, yarn is also woven into grey fabrics in M/s. SKS's own looms . The grey fabrics so obtained are given by M/s. SKS to M/s. SKL for processing on payment of processing charges. M/s. SKL return the processed fabrics on payment of excise duty to M/s. SKS, who in turn, sell it in the market. M/s. SKL is filing the price list with the department along with document titl .....

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nted the market rate paid by M/s. SKS to outside weavers for weaving yarn into fabrics. M/s. SKS also added process loss at the rate of 3% of the total cost of grey fabrics. Then, at last, processing and packing charges are added as agreed between SKL and SKS. All the costs reflected are based on prevalent market rates and the conversion and processing charges, both are either equal to or more than the actual charges paid by SKS / SKL. There is no dispute with regard to this. Learned Commissione .....

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any difference between the actual cost and market rate. In the said circumstances, the case of the appellant is clearly covered by Rule 6(b)(i) of the Central Excise (Valuation) Rules, 1975 and there is no need for valuation of goods under Rule 6(b)(ii). He further submits that as Tribunal in the appellants own case vide Final Order No. A/53669 -53670/2015 dated 24.11.2015, has discarded the addition of cost of various expenses from the balalnce sheet/ profit and loss account over and above the .....

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ame up before this Tribunal and this Tribunal has observed as under: 4. We have heard both the sides and examined appeal records. The valuation of processed grey fabrics for excise duty is in dispute. The lower appellate authority examined the issue in detail. The period of dispute is March, 2000 to December, 2000. The Revenue built their case against Respondents based on balance sheet for the year 1997-98. On this ground alone, the proceedings against the Respondents have to fail. This much has .....

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gures for purported undervaluation the Revenue relied on Profit & Loss Account and Balance Sheet of second Respondent for cost of grey fabrics. Further, addition to the cost thus arrived was made towards freight, tax, insurance, commission, etc. again based on the said Balance Sheet. We find such exercise to arrive at assessable value for the impugned period is without any legal basis and arbitrary. We find that during the relevant period, there was no statutory requirement or Board s guidel .....

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