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TMI Blog2004 (7) TMI 490X X X X Extracts X X X X X X X X Extracts X X X X ..... d of duty and imposition of penalty. Appeal No. E/618/03 is filed by the Commissioner of Central Excise, Visak on the ground that the value of the denatured spirit cleared from the factory to bulk buyers has not been correctly determined by the adjudicating authority. 2. M/s. Shri Sarvaraya Sugars Ltd., are manufacturers of Sugar, Molasses, rectified spirit and denatured spirit. Denatured spirit is manufactured out of rectified spirit by adding the required quantity of denaturant. They are clearing the denatured spirit in bulk and in small quantities on payment of central excise duty after filing price declarations under Rule 173C of Central Excise Rules. During the audit of the accounts of Shri Sarvaraya Sugars Ltd., and on enquiry it wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mills Ltd. has no dispute that the value of denaturant has to be added to determine the assessable value of denatured spirit. He only requested that extended period should not be made applicable as the appellants were showing the value of denaturants separately in the invoices as is apparent from Para 15 of the impugned order. 4. Shri P.M. Saleem learned SDR appearing for the revenue has said that for the denatured spirit supplied in bulk the appellants have not given the value of denaturant in any of the invoices as it was supplied to them by the customers free of cost. Whereas in the supplies made to retail customers the value of denaturant was shown separately and it was included in payment of Central Excise duty in the assessable val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue in their grounds of appeal has mentioned that the cost of denaturant was shown by them ranging from Rs. 9.51 to Rs. 26.51 per BL in their reply dated 21-5-2000 whereas they have shown the value of denaturant ranging from Rs. 11 to Rs. 25 in their letter dated 27-2-2002 and shows inconsistency. They said that the allegation is totally mis-conceived. Adjudicating authority adopted the rates for denaturant from Rs. 11 to Rs. 25 per BL depending upon average cost of each financial year. The statements showing the cost of rectified sprit, cost of denatured spirit included in the assessable value was shown by them in their reply dated 25-1-2000. In this statement actual cost of denaturant added to cost of rectified spirit to arrive at the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the appellant with an intention to evade payment of duty and it clearly attracts proviso to Section 11A(1). Therefore extended period for demanding duty and imposition of penalty has been correctly invoked. We find that the appellants have also contested imposition of penalty. We find that the penalty under Section 11AC has already been imposed on the appellants for the period prior to 28-9-1996. This is not correct in law. We also find that penalty imposed under Rule 173Q is quite high and we, therefore reduce the penalty imposed under Rule 173Q of the Central Excise Rules to Rs. ten thousand and set aside penalty under Section 11AC and direct the Commissioner to re-determine the penalty under Section 11AC of the Act for the duty short ..... X X X X Extracts X X X X X X X X Extracts X X X X
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