9911796707
TMI Blog2004 (12) TMI 227X X X X Extracts X X X X X X X X Extracts X X X X ..... of the other activities. In other words, the cost of the PSC pipes is not bifurcated in the contract amount. However, the appellant discharged duty based on the cost of the PSC pipes certified by their Chartered Accountant. The scrutiny of the Chartered Accountant certificate indicated that while arriving at the cost of PSC pipes, the cost of certain elements like nuts, hard crates, MS rods, overheads like interest, depreciation, maintenance of machinery and profit margin was not included. The Revenue conducted certain investigations and obtained the cost data rates from the KUWSDB. Further the cost of similar products manufactured by M/s. Indian Hume Pipes, Bangalore was also obtained. It was also revealed that the composite contract had an escalation charges and the Board awarded the escalation charges of Rs. 106.12 lakhs to the appellants. No duty was paid on the above charges. Therefore, show cause notices were issued to the appellants. The Commissioner fixed the value of the PSC pipes in terms of Section 4(1)(b) read with Rule 7 of the Valuation Rules on the ground that Section 4(1)(a) is not available. The value arrived at by the Commissioner was based on the data rate worke ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p; The duty cannot be demanded on mere assumption and presumption. In the tender document, it has been stated that each contractor should quote specific rate for each item without reference being made to KUWSDB schedule of rates or the estimate rates. This itself is enough to prove that the rate of either the Board or M/s. Indian Hume Pipes cannot be adopted as each contractor is supposed to quote his own rates. The Hon'ble Madras High Court in the case of Ashok Layland Ltd. v. Controller of Imports and Exports, Madras reported in 1999 (105) E.L.T. 30 (Mad.) had held that the Departmental Circular marked "Confidential" and hence public being unaware of its contents, cannot be held against the citizen if he has not fulfilled the instructions contained therein. In view of the above ruling the valuation based on the Confidential document of the Board is not sustainable. (vi) The Chartered Accountant's Certificate was produced in 1995 itself. The Department has chosen not to initiate any action till 2000. The Hon'ble Apex Court in the case of M/s. Union Carbide India Ltd. reported in 2003 (158) E.L.T. 15 (S.C.) = ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved for pipes works out to Rs. 2,93,062/- for the quantity of 7,815 mtrs for which the excise duty is to be paid. (ix) With regard to the second escalation of about 17.39% awarded in February 1997 amounting to Rs. 25.90 lakhs, it was stated that the escalation was yet to be received. Even though, the appellants had been awarded escalation charges amounting to Rs. 106.12 lakhs, they have not accepted the escalation awarded. The duty is become payable only when the amount is received and the same is collected by raising an excise invoice. (x) The quantification of escalation charges is not correct because the Department has assumed that the cost of manufacturing, supplying, laying, etc. of PSC pipes works out to 85% as claimed by the appellant in their letter dated 21-3-1997 and the assessable value of the PSC pipes works out to 73% of the contract price of PSC pipes. The Department's quantification is solely based on assumption and presumption and therefore, the demand of duty for escalation charges is not sustainable as it is premature. In the case of Electrical Engineering Equipment Co. reported in 199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch goods according to the best of his judgment, and for this purpose he may have regard, among other things, to any one or more of the methods provided for in the foregoing rules." Rule 7 is also known as the best judgment method. It is a fact that the appellant supplied the PSC pipes to KUWSDB. It is also seen that M/s. Indian Hume Pipes also supplied similar products to KUWSDB. The data rates of the Board have been arrived at in a scientific manner as revealed during the cross-examination of Shri Raveendra Bhatt, Superintendent Engineer of KUWSDB on 22-5-2001 during the adjudication proceedings. It was stated that the data rate has been prepared based on the observed data and the rates are worked out based on manufacturing process and the procedures adopted by different manufacturers which are observed and also based on feed back obtained from different manufacturers. It was also stated that the data rates are confidential document of the Board and used for arriving schedule of rates. The Commissioner has found that the rates adopted by M/s. Indian Hume Pipes are comparable to the data rate of the Board. In these circumstances, the Commissioner's method for arriving at the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
