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TMI Blog2001 (10) TMI 937X X X X Extracts X X X X X X X X Extracts X X X X ..... the period from 1995-96 to 1996-97 not accounted for in the statutory record and subsequently removed without payment of duty should not be demanded from them under Rule 9(2) read with proviso to Section 11A of the CEA, 1944; (iii) An amount of Rs. 3,72,209 being the duty not paid on the total quantity of blades 31,43,745 Nos. valued at Rs. 24,81,390/- which were used for testing purposes during the period from 1997-98 to 1999-2000 should not be demanded from them under Rule 9(2) read with proviso to Sec. 11A of the CEA, 1944; (iv) Duty amounting to Rs. 3,141/- on quantities reported to have been stolen during the years 1998 and 1999 should not be demanded under Rule 9(2) read with proviso to Sec. 11 A(1) of the CEA, 1944; (v) The credit of Rs. 1,71,083/- irregularly availed on fake invoice No. 942, dated 16-10-97 of M/s. Twenty First Century Printers Ltd. Silvasa and reversed under protest under Rule 233B of the CE Rules. 1944 vide entry No. 254, dated 11-6-99 should not be confirmed under Rule 57(1) of C.E. Rules, 1944; (vi) A penalty equal to the duty demanded at Sl. No. (i) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailed on the fake invoice No. 941, dt. 16-10-97 of M/s. Twenty First Century Printers Ltd., Silvassa should not be imposed under Rule 57-I(4) of the Central Excise Rules, 1944; (vii) Interest as applicable should not be collected on the amounts mentioned at Sl. Nos. (i) to (iv) above in terms of Sec. 11AB of the Central Excise Act, 1944; and (viii) Penalty should not be imposed under Rule 9(2), 52A(8), 173Q of the Central Excise Rules, 1944 for contravention of Rules 9(1), 52A, 57G, 173B, 173C, 173F, 173G of the Central Excise Rules, 1944." 3. The appellants have filed the stay application challenging both the orders. They seek for waiver of pre-deposit and for remand of the matter on the following grounds : (a) Both the appellants are job workers for manufacture of blades for Vidyut Metallic Ltd., Bombay. Appellants had filed their classification list, price list and other declarations declaring the selling price of the blades which they had taken up for manufacture on behalf of Vidyut Metallics Ltd., under Notification No. 27/92, dated 14-5-92. In terms of the said notification the valuation under Section 4 is required to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve the processor's factory plus his profit. Rule 174 of the CE Rules, 1944 enjoins that when goods owned by one person are manufactured by another the information is required relating to the price at which the said manufacturer is selling the said goods and the person so authorised agrees to discharge all the liabilities under the said Act and the rules made thereunder. The price at which he is selling the goods must be the value of the grey-cloth or fabric plus the value of the job work done plus the manufacturing profit and the manufacturing expenses but not any other subsequent profit or expenses. It is necessary to include the processor's expenses, costs and charges plus profit, but it is not necessary to include the trader's profits who gets the fabrics processed, because those would be post-manufacturing profits." 4. They contend that in terms of the above ruling the price of the manufacture is required to be taken from that of the manufacturer and not that of the job worker. They contend that the department got the whole issue verified through a Cost Accountant in respect of both the appellants. The report was submitted and a copy was furnished to appellants. The appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E.L.T. T3 = 2001 (46) RLT M79]. They contend that this judgment and the Board's circular was not available when the Commissioner confirmed the amounts and therefore the Commissioner could not apply the ratio of the Tribunal's judgment cited and the Board's circular following that the process of cutting CRSS sheets does not amount to manufacture and the duty amount of Rs. 96,25,682/- is required to be set aside. 9. They further contend that in respect of RCC Sales Pvt. Ltd. an amount of Rs. 50,30,212/- has been confirmed being the duty not paid on blades produced and said to be clandestinely removed by them on allegation of under-valuation. It is contended that this amount is not liable to be confirmed as the department had referred their objection on the first report of the Cost Accountant for re-valuation. The report was awaited and in the absence of the second report the proceedings should not have been concluded and demands confirmed on this ground. Therefore, the matter requires to be remanded back to take into consideration the second report of the Cost Accountant which is awaited in the matter. 10. Ld. Counsel Shri N. Venkatachalam, Advocate along with Shri Muthu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pport of some case laws that when the buyer is to take Modvat benefit, extended period is not invocable for demand of duty. I have carefully gone through the case laws vis-a-vis the facts of the present case. I find that the facts of the present cases are not covered by the ratio decided in the said cases. There, in those cases, no stock transfer is involved. Whereas in the present case, the transactions among three units viz VML, RCC and Microraj under agreement, are more or less in the nature of transfer pricing and hence scope of suppressing value in order to share financial accommodation among the three units and ultimately suppressing the value of final products cannot be ruled out and hence I am lead to an irresistible conclusion that there is short payment on account of under-valuation. Further, I must also say that the present case is similar to Ujagar Prtints case. The Constitution Bench in a two paragraphs order dt. 27-1-89 reported in 1989 (39) E.L.T. 493 clarified that the assessable value of the processed fabric would be value of gray-cloth (raw material) in the hands of processor (job worker) plus the value of job work done plus manufacturing profit and manufacturing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellants should be put to terms to pre-deposit the amount. He contends that the matter can be agitated and argued at length at final stage by which time he will have the benefit of comments from Commissioner. 15. On a careful consideration of the submission made by ld. Counsel and ld. DR in the matter and on perusal of the entire material before us and the judgment cited including the impugned order, we are of the considered opinion that the main point required for confirmation of the duty is : (a) to arrive at the correct valuation, (b) to come to a conclusion as to whether there was any clandestine removal or not. 16. Both the show cause notices has adopted to costing on the basis of the Cost Accountant's report. This was challenged and the grounds were raised by the appellant. The Cost Accountant took up the matter for reconsideration and submitted his report in the case of Micro Raj Electronics. 17. This vital basis of observation was required to have been taken into consideration by the ld. Commissioner. On a perusal of the finding portion of the Commissioner's order, we notice that he has not referred to secon ..... X X X X Extracts X X X X X X X X Extracts X X X X
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