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2017 (6) TMI 807 - CESTAT CHENNAI

2017 (6) TMI 807 - CESTAT CHENNAI - TMI - Valuation - Section 4(1)(b) of the Central Excise Act, 1944 - The entire clearance was made to Pallavaram Unit. About 98% of the goods so cleared are consumed by the Pallavaram Unit for manufacture of various final products. 2% of the same are sold by Pallavaram unit as spares at a higher rate to various customers? - Held that: - no mens ria can be attached to the Appellants in respect of the said action by their Pallavaram Unit - the submission of the A .....

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Ms. Sulekha Beevi C.S., Member (Judicial) And Shri V. Padmanabhan, Member (Technical) Shri S. Nagalingam, AC (AR) for the Appellant None for the Respondent ORDER Per Bench Brief facts of the case are that the appellants are engaged in manufacture of plastic moulding, falling under Chapter 85 of the Central Excise Tariff Act, 1985. The appellants manufacture and clear part Nos.S.G.A. 3100026 (inter face barrier), S.G.A.3100027 (moving arm) and SGA 31101163 (isolating contact support) to their Pal .....

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s. The issue in the instant dispute is whether the assessable value is to be calculated as done by the appellants (unit at Pondicherry) or at the higher rate cleared by the Pallavaram Unit as spares. 2. On the basis of the price declarations filed by Pallavaram unit, department was of the view that comparable prices are available for these three products and therefore such prices have to be adopted to arrive at the assessable value. Show cause notices were issued alleging the same and after due .....

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ram unit for identical goods. The method of valuation based on cost constuction should be resorted to only when the value of comparable / identical goods is not available. That Commissioner (Appeals) has erred in setting aside the demand by accepting the contention of the appellant that Pallavaram Unit sold only small percentage as spares and that such price cannot be adopted as comparable price. Since there is gross undervaluation which was well within the knowledge of respondent, the appeal ma .....

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, it has to be stated that the show cause notice is issued against Pondicherry unit and not against the Pallavaram unit. Moreover, the alleged sales at Pallavaram is admittedly only 2% of the clearances made from Pondicherry unit and the balance 98% is captively consumed. The case of department is that for this balance 98% also the price of the sale of 2% should be adopted which in our opinion does not make any sense. The Commissioner (Appeals) has discussed the issue as under:- (a) The short qu .....

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