TMI Blog2004 (7) TMI 263X X X X Extracts X X X X X X X X Extracts X X X X ..... er Rule 173Q(1) of the Central Excise Rules, 1944; (e) confiscated land, building, plant and machinery of M/s. Ashima Denims with option to redeem on payment of fine of Rs. 15 lakhs; (f) imposed following penalties on officers of M/s. Ashima Denims under Rule 209A of Central Excise Rules : (1) Rs. 10 lakhs on Shri Atul Kumar Singh, Group President (Operations); (2) Rs. 1 lakh on Shri H.S. Rajput, Asstt. Manager (Excise); (3) Rs. 2 lakhs on Shri K.B. Dave, Sr. General Manager (Commercial); (4) Rs. 1 lakh on Shri Jayesh C. Bhayani, Sr. General Manager (Finance). The manufacturing unit and its officers are in appeal before us. The Revenue is in appeal against - (a) reduction of the demand from Rs. 85,28,607/- to Rs. 77,52,053/- by allowing abatement of Octroi, sales tax etc.; and (b) dropping the proposal for charging of interest under Sec. 11AB of the Central Excise Act, 1944. 2.The issues in the appeal filed by M/s. Ashima Denims Ltd. involve, determination of valuation of yarn for captive consumption and valuation of yarn purchased from outside for captive consumption after dyeing sizing and the applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... educed to Rs. 6,50,309/-. It is also contended that the same logic which weighed with the Commissioner for dropping demand on dyed yarn manufactured and captively consumed viz. that the process of dyeing was in the knowledge of the department from the classification lists filed by the assessees, should have been applied to drop the demand of duty on yarn purchased from outside for captive consumption after dyeing and sizing. On limitation, the submission of the appellant was that there was no intention to evade payment of duty, and mere non-filing of price list does not amount to suppression. The appellants also argued that in the circumstances of the case, no penal action is called for either against the company or its officers. 5.On the other hand, Shri K.M. Mondal, Consultant appearing for the Revenue submits that Rule 6(b)(i) of the Valuation Rules has no application in the facts and circumstances of the present case [even though there is no dispute that for valuation of captively consumed yarn, Rule 6(b)(ii) cannot be applied straightaway unless Rule 6(b)(i) is ruled out] for the reason that the Commissioner has recorded a clear finding as to why invoices from other manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f production of captively consumed goods will "hence forth" be done strictly in accordance with CAS. 4. The respondents submit that the decision in the case of Bharti Systel Ltd. is no longer good law in view of the latest judgment of the Apex Court in Kalyani Packaging Industry v. U.O.I. [2004 (168) E.L.T. 145 (S.C.)] wherein it has been held that Board's circular cannot have over-riding effect over the law laid down by the Supreme Court. As regards addition of over-all profit, the respondents contend that the impugned order is based upon the decisions of the Tribunal such as Kanoria Chemical Industries v. CCE, Allahabad [1995 (80) E.L.T. 795 (T)]. However, the respondents have no comments to offer on the Larger Bench decision in the case of Raymonds Ltd. cited supra. On the question of valuation of yarn purchased from outside for captive consumption after dyeing-cum-sizing, the respondent submits that although the process of dyeing of yarn was deemed to amount to manufacture with effect from 1-3-1995 by incorporation in Note (1) to Chapter 52, even prior to that date, it was covered by the main definition of 'manufacture' in Section 2(f) of the Central Excise Act. As for the valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submit that they have valued the yarn on the basis of valuation of comparable yarn available in the market. In the course of investigation as well as adjudication, invoices were supplied to the department to demonstrate that the yarn is valued on the above basis. The show cause notice does not clearly make out that the yarn manufactured by the assessee is not comparable to other yarn whose market value constitutes the basis for valuation of the present yarn. The notice merely states that because of various aspects which may affect the valuation of yarn, such as machinery, count of yarn, fibre etc., yarn can never be valued on the basis of comparable yarn value. On this basis, the notice proceeds to hold that the yarn cannot be valued under Rule 6(b)(i) of the Valuation Rules and has necessarily to be valued in terms of Rule 6(b)(ii). However, we note that in the case of CCE, Bhopal v. Raymonds Ltd. [2001 (128) E.L.T. 94], it has been held that even if yarn differs in material characteristics, necessary adjustment can be made under Rule 6(b)(i) and yarn valued on the basis of comparable yarn. There is no clear finding of the Commissioner as to why yarn whose market value sought to b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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