2003 (10) TMI 543 - AT - Central Excise

Summary

Issues: Valuation of goods at Talasari unit, Bar on demands due to limitation, Revenue neutrality between two units, Interest costs in cost of production, Waiver of pre-deposit requirements.

Valuation of goods at Talasari unit: The judgment addresses the valuation of goods at the Talasari unit, which was disputed in the proceedings. The prices were determined under specific valuation rules, while the appellant argued for a different valuation method based on resale prices and expenses at the Daman unit. The issue of appropriate valuation was deemed crucial and left for final determination at a later stage.

Bar on demands due to limitation: The appellant contended that the demands were time-barred, emphasizing that a significant portion of the total demand fell under the extended period. They argued for the invocation of the extended period due to revenue neutrality between the two units of the same company, asserting that there was no intention to evade duty and complete declarations were made to the department.

Revenue neutrality between two units: The concept of revenue neutrality between the Talasari and Daman units of the appellant's company was highlighted. It was argued that due to revenue neutrality, the demands were not sustainable as there was no loss of revenue or intent to evade duty. The appellant relied on relevant case law to support their position on revenue neutrality.

Interest costs in cost of production: The appellant contended that interest costs should not be considered as part of the cost of production, which would result in a reduction of the duty demands. This argument was put forth in conjunction with the issue of appropriate valuation and the overall impact on the duty liabilities.

Waiver of pre-deposit requirements: After considering the submissions and material on record, the tribunal found merit in the appellant's contentions. It was observed that both units had paid substantial amounts of duty, leading to a situation where a complete waiver of pre-deposit requirements under Section 35F was deemed appropriate. As a result, the tribunal ordered that the recoveries of the determined amounts should not be enforced pending the hearing of the appeals, indicating a favorable decision towards the appellant on this issue.