TMI Blog2004 (3) TMI 577X X X X Extracts X X X X X X X X Extracts X X X X ..... 1994-95 and the second 1995-96. Both the notices are issued invoking longer period of limitation under Section 11A(1) proviso. 3. The appellant is engaged in the manufacture of yarn. He receives various duty paid raw materials for use as inputs in the manufacture of yarn. The appellant pays excise duty on the yarn captively consumed at the spindle stage. The assessable value of such captively consumed yarn is arrived at on the basis of the valuation rules framed under Section 4(1)(b) of the Central Excise Act, viz. the Central Excise (Valuation) Rules, 1975. The appellant was required under Rule 173C to file price declaration in the proforma Annexure II with the Central Excise Department, declaring the assessable value of the yarn captiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd conversion cost kept on changing over the period thereby increasing the cost, the change in corresponding assessable value was not effected by the assessee by way of filing a revised price list/annexures for the period in question. The assessable value declared in various Annexure II filed from time to time did not include all elements of cost required to determine the assessable value in terms of Section 4 of Central Excise Act. Specifically the share of administrative overheads, selling and distribution expenses, profit, interest etc. were not included by the appellant while computing the assessable value. The appellant, even after the finalisation of account and preparation of reports under Cost Audit Report Rules, had failed to intim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t non-submission of the cost audit report cannot be held as suppression or omission on the part of the appellant. It was further contended that during the relevant period the appellant filed six declarations in Annexure II along with their Chartered Accountant certificate setting out the assessable value and the basis of computation thereof. It is only on the basis of these declarations the department had been issuing letters to the appellant, asking them to make good various omissions on their part during the relevant period. They have been accordingly doing so. If the department had felt that certain other elements of cost which should have been taken into consideration while computing the cost they should have made it clear to the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tuity, interest etc. should have been added could be made only within the normal period of limitation. Even when the appellants had not indicated the various elements of cost under the head Manufacturing Cost it is for the department to seek clarification from the appellants. The department on the other hand has been raising objections regarding non-inclusion of notional profit as if they were satisfied with the declaration in regard to manufacturing cost declared by the appellants. In the present case, the show cause notices came to be issued in 1999 for alleged short levy that occurred in 1994-1996. We hold that the show cause notices are clearly time barred. 9. On the issue of merits, we observe that the appellant had all along been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umed yarn. The cost of further processes mentioned above would naturally go into the cost of fabric. We agree with the contention of the appellant that the cost of production of yarn should therefore include all costs that go into the manufacture of yarn up to spindle point. The second contention of the Commissioner is that certain elements of cost pertaining to administrative overheads, selling and distribution expenses, profit, interest etc. should have been included while computing the cost of yarn. The appellant contended that marketing, selling and distribution expenses cannot be included while computing the cost of manufacture of captively consumed goods for the reason that there is no sale of captively consumed yarn. He relied upon C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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