2009 (5) TMI 801 - AT - Central Excise

Summary

Issues Involved:
1. Assessable value determination of PSC pipes cleared by the respondent.
2. Applicability of Rule 6(b) of CEVR, 1975 and Rule 8 of CEVR, 2000.
3. Time-barred nature of the show cause notice dated 13-7-2001.

Summary:

1. Assessable Value Determination:
The respondent, a partnership firm, supplied PSC pipes to their Secunderabad unit for laying a pipeline. The dispute concerns the assessable value of these pipes for the periods from April 1998 to May 2000 and January 2002 to October 2002. The Department argued that the clearances should be treated as captive consumption and valued accordingly. The Tribunal found that since the goods were not sold but used for laying pipelines, Rule 6(b) of CEVR, 1975, and Rule 8 of CEVR, 2000, were not applicable. Instead, the assessable value should be determined under Rule 7 of CEVR, 1975, and Rule 11 of CEVR, 2000, using the best judgment method.

2. Applicability of Rule 6(b) of CEVR, 1975 and Rule 8 of CEVR, 2000:
The Department contended that the duty should have been paid based on the cost of production plus actual profit (24.57%) for the period before 1-7-2000 and 115% of the cost of production for the period after 1-7-2000. The Tribunal noted that the respondent had paid duty based on 110% of the cost of production and found that the correct method for determining the assessable value was under Rule 7 of CEVR, 1975, and Rule 11 of CEVR, 2000, rather than the rules cited by the Department.

3. Time-barred Nature of the Show Cause Notice:
The Tribunal upheld the Commissioner (Appeals)'s decision that the show cause notice dated 13-7-2001 for the period from April 1998 to December 1998 was time-barred. It was noted that prior show cause notices for subsequent periods were issued under normal limitation without alleging suppression of facts. The Tribunal relied on the Supreme Court's judgment in Nizam Sugar Factory v. CCE, which held that facts known to the authorities in earlier notices could not be grounds for alleging suppression in later notices.

Conclusion:
(a) The Tribunal upheld the part of the impugned order-in-appeal dated 18-6-04 that set aside the Joint Commissioner's order for the period from April 1998 to December 1998 on the ground of time-bar, dismissing the Revenue's appeal No. E/4551/04-NB.
(b) The Tribunal set aside the remaining part of the impugned order-in-appeal dated 18-6-04 and the order-in-appeal dated 28-6-04, remanding the matter for de novo adjudication to re-determine the assessable value, differential duty, and penalty.

Disposition:
The Revenue's appeals No. E/4552/04, E/4553/04, E/4554/04, E/4570/04, and E/4590/04, along with the Cross Objections No. CO/398-399/04-Ex. and CO/400-403/04-Ex filed by the Respondents, were disposed of accordingly.