2010 (7) TMI 857 - AT - Central Excise

Summary

Issues involved: Alleged under valuation of final product Concentrated Nitric Acid (CNA) cleared to related unit, applicability of Rule 8 u/s Rule 4, challenge on limitation, interpretation of Section 11A(2B) for duty payment.

Alleged under valuation of final product: Appellants faced show cause notice for under valuation of CNA cleared to related unit. Revenue argued for adopting value as 115% of product cost u/s Rule 8 for related persons. Appellants contended Rule 8 applies after Rule 4, citing Ispat Industries Limited case where Rule 8 applies only for entire production transfer to related units.

Challenge on limitation: Appellants challenged demand on limitation grounds. Adjudicating authority found no suppression or mis-statement due to timely monthly returns filing. Commissioner treated voluntary duty payment as short paid duty u/s Section 11A(2B), imposing interest but no penalty.

Interpretation of Section 11A(2B): Appellants argued against admitted duty liability, contesting duty demand from the start. Commissioner's findings showed no suppression or mis-declaration, hence Section 11A(2B) not applicable. Show cause notice invoked extended limitation period, but appellants contested demand on merits, not accepting short paid or non-paid duty.

Conclusion: Commissioner's order set aside as no suppression found, longer period not justified. Appellants' appeal allowed with consequential relief. Commissioner's decision on limitation and Section 11A(2B) interpretation not upheld due to lack of merit in findings.