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TMI Blog1988 (2) TMI 252X X X X Extracts X X X X X X X X Extracts X X X X ..... different values for Government customers. It is submitted that the Section 4 has inbuilt provisions for dealing with situations e.g. a best judgment valuation under valuation Rule 7. In view of this the only way to determine the value in an arm length transaction with a public undertakings is to apply the principles of Section 4(1 )(i) and 4(4)(e) and compute the value under Rule 7 of the Valuation Rules. There is also a Tribunal decision which covers an indentical job work case, namely : 1987 (29) E.L.T. 697 (Tribunal) = 1987 (12) ECR 169 in Re : CCE Patna v. Asian Electric in which the Tribunal has held that the assessable value would be material costs plus job charges : There is yet another decision 1987 (12) ECR 421 in Re: Manibhai Brothers (Sleepers) v. Assistant Collector of Central Excise, Baroda which even says that the value of finished product cannot include cost free inputs received from the Railways which is also about the same case in the above appeal. This citation also relates to a case in which there was no sale to Government. In view of the above decisions as read with the Special provisions in Section 4(i) and 4(4)(e), the Hon ble Bench may like to re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -1982 to the appellants alleging that they had not adopted correct value for the DADS supplied to .HOC and that the correct assessable value of the same should be Rs. 63/- per Kg. as in the case of DADS sold in the market. On the basis of this value, the total value of clearances of DADS during 1981-82 came to Rs. 31,75,030/- which exceeded Rs. 30 lakhs. As a result, it was alleged, they were not entitled to exemption under Notification No. 105/80-C.E., dated 19-6-1980 in respect of value of clearances to the extent of Rs. 1,75,030.00, being the excess clearance over the limit of Rs. 30 lakhs during 1981-82 and also from the very first clearance during 1982-83. Superintendent, therefore, asked the appellants to explain why duty amounting to Rs. 87,687.20, being 8% on the value of clearances Rs. 10,96,090.00 (i.e. Rs. 1,75,030.00 during 1981-82 and Rs. 9,21,060.00 during 1982-83), should not be recovered from them under Section 11A(1) of the Central Excises and Salt Act, 1944 as they had suppressed facts and made wilful mis-statement of the .value of clearances during 1981-82. It was alleged in the show cause notice that they had committed breach of Rules 174, 9, 49, 52A, 173B and 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 2,13,400/- only. Regarding valuation, Shri Kohli argued that the value for the goods supplied to HOC should be the price received from them by the appellants as provided in the Notification No. 120/75-C.E. and this would be Rs. 31,000/- per M. Ton including the conversion charges. M/s. HOC and the other buyers to whom 7% of products were sold are two separate classes of buyers and the valuation of those two separate classes of buyers should be governed by the first Proviso to Section 4(1)(a) of the Central Excises and Salt Act. In support of his argument that the supplies made to HOC should be excluded from the computation, the same being exported by them, Shri Kohli relied on the Tribunal s decision reported in 1983 E.L.T. 2367 (Tribunal) = 1983 ECR 1371D (CEGAT) in the case of M/s. International Minelmech P. Ltd. v. Collector of Central Excise, Meerut. 9. Shri Chakraborty, for the respondent argued that there was no sale by the appellants to HOC in the ordinary course. So, the price at Rs. 63/- per Kg. relating to direct sales to customers should be applied to the goods supplied to HOC. He also argued that the exemption under Notification No. 105/80-C.E. could be admissible i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods could not be taken into consideration for computation of the value of clearances for the purpose of Notification No. 105/80-C.E. We do not find any reason to disagree with the view already taken by another Bench of this Tribunal. Respectfully following the said decision, we also hold that for the purpose of benefit of exemption under Notification No. 105/80-C.E. the value of the goods exported out of India should not be included in the computation of the value of clearances and it is not necessary that the goods should be cleared from the factory for direct export by the assessee. We, therefore, hold that the benefit of exemption Notification should be extended to the appellants if they are in a position to establish on the basis of necessary documentary evidence that the goods supplied by them to M/s. HOC were actually exported by the latter out of India. The appellants have not produced before us any evidence in this respect, but they have raised this ground. In the circumstances, this aspect is required to be re-examined by the lower authority and for this purpose the case will have to be remanded to the concerned Assistant Collector of Central Excise. 11. In respect of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imilar to those of the present case before us. In the said case, no manufacturing process was carried on the Mcl inserts supplied by the Railways. The goods were sold by the manufacturer to the Railways and the manufacturer opted for invoice value as envisaged under Notification No. 120/75-C.E., dated 30-4-1975. The facts are not similar in the present case. The said decision has no force in the present case. 13. Shri Kohli has argued that the invoice value should be adopted to the goods supplied to HOC, under Notification No. 120/75-C.E., dated 30-4-1975. This contention is also not acceptable as there was no sale to HOC in respect of 93% goods supplied to them. The Notification No. 120/75-C.E. granted partial exemption of Central Excise duty on goods falling under Item No. 68 of the Central excise Tariff, cleared from the factory of manufacture on sale . In order to be eligible for exemption under that Notification, the following conditions were also to be fulfilled :- (i) the manufacturer files with the Superintendent of Central Excise having jurisdiction a written declaration to the effect that he opts to avail of the said exemption; (ii) the manufacturer avails of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry was made, the appellants filed another declaration on 31-8-1982 giving particulars of the Financial Year 1981-82 and exhibited the value separately as conversion charges and value for which sales were made by them to independent buyers. It was alleged in the show cause notice that the appellants had suppressed the facts and made wilful mis-statement of the value of the goods cleared during 1981-82 and also committed breach of Rule 174 of the Central Excise Rules by not taking a Central Excise Licence when they had crossed 80% of the exemption limit of Rs. 30 lacs value of clearances. The Collector (Appeals), in paragraph 10 of the impugned Order, has held that the appellants had suppressed relevant facts, and that invoking the extended period of 5 years under proviso to sub-section (1) of Section 11A of the Central Excises and Salt Act, was justified. From the copy of declaration No. F-19:MD:775, dated 3-6-1982, addressed to the Superintendent of Central Excise, MOR-II-Uppal, Hyderabad-III, Division, filed by the appellants, we observe that against Item No. 5 of the Schedule to the declaration they showed that Rs. 10.10 lacs of 3-3 Diamino diphenyl sulphone was manufactured by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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