2008 (7) TMI 824 - AT - Central Excise

Summary

Issues involved: Determination of correct value of grey fabrics supplied by merchant manufacturer for processing, Allegation of mis-declaration of value by merchant manufacturers, Application of decision in CCE, Mumbai v. Lajya Dyeing & Bleaching Works.

The appeal before the Appellate Tribunal CESTAT, Mumbai involved the issue of determining the accurate value of grey fabrics supplied by a merchant manufacturer to the respondents for processing into finished fabrics. The lower authority had upheld a demand based on the alleged incorrect declaration of value by the manufacturer. However, the ld. Commissioner (Appeals) overturned this decision, stating that there was insufficient evidence to prove connivance or misdeclaration by the processor. The Tribunal noted the lack of evidence presented by the Revenue to establish any connivance or knowledge on the part of the processor regarding the alleged misdeclaration of value. The Tribunal referenced the decision of the Hon'ble Supreme Court in CCE, Mumbai v. Lajya Dyeing & Bleaching Works to support their conclusion.

The ld. Commissioner (Appeals) based their decision on the lack of evidence showing connivance by the respondent in misdeclaring the value of grey fabrics. The Tribunal concurred with this assessment, noting the absence of proof provided by the Revenue to demonstrate any knowledge or involvement of the processor in the alleged misdeclaration. The Tribunal emphasized that the decision in the case of Lajya Dyeing & Bleaching Works supported the position that the extended period of limitation did not apply in the absence of evidence of deliberate misdeclaration by the processor.

In conclusion, the Appellate Tribunal CESTAT, Mumbai rejected the appeal filed by the Revenue, upholding the decision of the ld. Commissioner (Appeals) that there was no evidence to support the allegation of misdeclaration of value by the merchant manufacturers. The Tribunal found that the decision was in line with the precedent set by the Hon'ble Supreme Court, as highlighted in the case of CCE, Mumbai v. Lajya Dyeing & Bleaching Works.