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CCE, Delhi-IV, Faridabad Versus Batra Associates Ltd.

2018 (1) TMI 262 - CESTAT CHANDIGARH

Valuation - brass scrap - Whether in the facts and circumstances of the case, the charge of under valuation is sustainable against the respondent or not? - Held that: - the respondent has suffered duty on the finished goods, the job charges are not disputed by the revenue and all the brass scrap sent to the job worker have been received by the respondent after conversion into the brass rods, in that circumstance, it is situation of revenue neutrality and there is no loss of revenue to the depart .....

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0001/2018 - Dated:- 1-1-2018 - Mr.Archana Wadhwa, Member (Judicial) And Mr.Devender Singh, Member (Technical) For the Appellant : Shri G.M.Sharma, AR For the Respondent : Shri Somesh Arora, Advocate ORDER Per : Archana Wadhwa: Being aggrieved with the order of by the Commissioner (Appeals) vide which charge of undervaluation stands dropped by him, Revenue has filed the present appeal. 2. We have heard ld.AR for the Revenue and Shri Somesh Arora, ld. Advocate for respondents and have gone through .....

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aluation of brass scrap generated in their factory and on scrutiny of the balance sheet for the year 1996-97 to 2000-01 and inventory summaries showing the position of their closing stocks, it was noticed that the value per kg of brass scrap inclusive excise duty was ₹ 98/- as on 31.3.1999, ₹ 108/- as on 31.3.2000 and ₹ 95/- as on 31.3.2001 whereas as per the invoices, the value of scrap cleared by the respondent was ₹ 50/- to ₹ 65/- per kg during the relevant perio .....

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sis found to be ₹ 77.50, ₹ 82.75 and ₹ 79.50 per kg. As the price of brass scrap determined and applied by M/s.Hindustan Wires, the assessable value ascertained and on the basis of that, the assessable value by the respondent was ascertained. Based on this calculation, the show cause notice was issued to the respondent on 20.3.2002 by invoking the extended period of limitation, for recovery of duty alongwith interest and for imposition of penalty for the period from 1.4.1997 to .....

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annot be taken as assessable value (b) there was situation of revenue neutrality and (c) the extended period of limitation is not invokable. 6. It is his submission that the Revenue has obtained a comparable price from M/s.Hindustan Wires, Faridabad to ascertain proximity of value of mixed brass scrap and if the same is to be considered, the value shown in the balance sheet by the respondent is correct value and on that value the respondent is required to pay duty on brass scrap. He further subm .....

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the extended period of limitation is rightly invoked. In that circumstance, he prays that the impugned order is to be set aside and the order of adjudication is to be affirmed. 7. On the other hand learned Counsel for the respondent opposed the contention of the learned AR and submits that it is an admitted fact that the respondent has cleared the brass scrap on payment of duty to the job worker and job worker after doing the job work has sent the entire goods to be used in the manufacturing of .....

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n that circumstance, the respondent was required to pay less duty on the job worked goods. He further submits that the activity of the respondent of clearance of brass scrap at lower price was known to the department, therefore, the extended period of limitation is not invokable. He also submits that the value shown in the balance sheet cannot be the price for sale of the goods as held by the Apex Court in the case of CCE, Vapi vs. Synlab Sales-2015 (318) ELT 38 (SC). He, therefore, prayed that .....

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#8377; 14/- per kg for conversion of the brass scrap into brass rods and the brass scrap after conversion has been received by the respondent. To decide the issue, the case is required to be understood by an example. To illustrate this, we take the following figures (a) Price of brass scarp ₹ 50.00 per kg (b) Conversion charges ₹ 14.00 per kg (c) Purchase price of job worked goodsi.e. brass rod: ₹ 100 per kg (d) Price of brass scrap shown in the Balance sheet excluding duty  .....

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77; 50/- per kg and job work charges ₹ 14/- per kg but the job worker is paying duty on ₹ 100/- per kg i.e. on the market price of the brass rods. It means that the respondent has suffered/paid duty at the differential value of brass scrap. Therefore, from the illustration, it is clear that the respondent has suffered duty on final product i.e. the brass rod although clearing the brass scrap at lower price. In that circumstance, there is no loss of revenue to the department. Otherwis .....

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