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M/s. Super Spinning Mills Ltd Versus Commissioner of Central Excise, Coimbatore

2017 (8) TMI 1274 - CESTAT CHENNAI

Valuation - production of various counts of yarn, and cleared to sister units - Section 4 (1) (b) read with Central Excise (Valuation) Rules, 2000 - Time limitation - revenue neutrality - Held that: - the appellant was following the cost of production as certified by a Cost Accountant. The department arrives at a different value of cost of production. Thus, the value adopted by the appellant is not baseless and on this score also, no mens rea can be attributed to the appellant. - Time limita .....

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( Judicial ) And Shri Madhu Mohan Damodhar, Member ( Technical ) Shri Santhana Gopal, Advocate For the Appellant Shri B Balamurugan AC (AR) For the Respondent ORDER Per Bench The facts of the case in brief are that the appellants are manufacturers of cotton woven fabric falling under sub heading No.5207.20 and cotton yarn (twisted/doubled) falling under sub heading No.5205.11/5205.19 and cleared their doubled cotton yarn of different counts to their sister unit M/s.Super Spinning Mills, Unit D .....

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ter unit. Therefore, the appellants was requested to produce a cost certificate showing the cost of production of yarn of various counts manufactured and cleared to their sister concern namely M/s.Super Spinning Mills, Unit D. On perusal of the costing certificate showing the cost of production of various counts of yarn, it was found that the cost adopted for the payment of duty in some months was less than the cost of production for certain counts of yarn cleared to their sister unit (Eg.2/36 C .....

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from May 2003 to July 2004 by adopting an assessable value of ₹ 5,94,15,022/- which was lower than the value of ₹ 6,60,78,164/- determined in terms of the costing certificate produced by them and also in accordance with Section 4 (1) (b) read with Rule 9 of Central Excise (Valuation) Rules, 2000. This resulted in short payment of duty on differential value of ₹ 66,63,142/- which works out to ₹ 6,13,009/- [Rs.5,33,051/- (BED) and ₹ 79,958/- [AED T&T]]. Thus the .....

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er (Appeals) upheld the same. Hence this appeal. 4. On behalf of appellant, Learned Counsel Shri Santhana Gopal made the following main submissions : 4.1 The appellant was doubling various counts of yarn like 20 counts, 30 counts, 40 counts, etc. The assessable value is disputed only for certain counts of yarn in some months. The annexure to the Show Cause Notice disputes for the counts of 2/30, 2/38, 2/38 zari, 2/40 and 2/40 zari pertaining to the months May, 2003 to July, 2004. The dispute is .....

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score also, no mens rea can be attributed to the appellant. There is no dispute on the basis of determination of value i.e., cost of production and the dispute is only regarding the quantum. 4.3. During the impugned period, the assessee adopted the total value of ₹ 5,94,15,022/- and paid excise duty on that value. As per the department, the value should be ₹ 6,60,78,164/- i.e. ₹ 66,63,142/- more. The quantity involved is 4,62,442 kgs. This data shows that around 11% is the valu .....

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o the case of the department. 4.5 The doubled yarn was used in manufacture and export from unit D or sold in India on payment of excise duty. Thus, even if the differential excise duty of ₹ 6,13,009/- is payable, it is available as credit to the recipient unit 'D'. Therefore, no revenue loss had occurred to the government on account of the alleged lesser valuation. 4.6 It is an admitted position that the excise duty paid by appellant was taken as Cenvat credit at the recipient unit .....

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