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TMI Blog2007 (3) TMI 614X X X X Extracts X X X X X X X X Extracts X X X X ..... Regulators, Head Lumps and parts thereof Railway Clips and were availing Cenvat facility on the inputs used in the manufacture of finished products. For verification whether Brass Scrap generated in the factory of the Appellant was being substantially under-valued and removed on short payment of duty, their premises was visited by Central Excise Officers and relevant records were resumed for scrutiny. On scrutiny of Balance Sheets for the years 96-97 to 2000-01 and Inventory Summaries showing the position of their closing stocks it was noticed that the value per Kg. of Brass Scrap inclusive of excise duty was Rs. 98/- as on 31-3-99, Rs. 108/- as on 31-3-2000 and Rs. 95/- as on 31-3-2001. Whereas as per invoices the value of scrap cleared from the Appellant s factory was between Rs. 50/- to Rs. 65/- per Kg during the relevant period. On enquiry regarding price difference it was clarified by the authorized representative of the Appellant that Brass Scrap was not being sold in the market but sent for conversion into brass rods. In order to ensure the correctness of the assessable of mixed Brass Scrap determined and adopted by the Appellant, a test study in respect of removal of Bra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demand. The fact is that as per invoices, the market rate of brass rod, exclusive of excise duty, in 1999 was Rs. 97/- per Kg and Rs. 109/- per Kg in 2000 which value is reflected in their relied upon balance sheets. (iii) That the Adjudicating authority overlooked the fact that the department referred to said to be invoices of M/s. Hindustan Wires Ltd. (which were not proved on record) but the value of Brass Scrap therein, said to be test study had not been adopted against them. The department had itself bidden goodbye to the invoices of M/s. Hindustan Wires Ltd. (iv) That the demand in the show cause notice has been worked out adopting the balance sheet value of closing stock of Brass Scrap (which was the same as value of brass rod in the balance sheet for the years 1998-99, 1999-2000, 2000-01) to be the value for the years 1997-98, 98-99, 1999-2000, 2000-2001 and 2001-2002 treating the balance sheet value to the cum-duty value of Brass Scrap/rod in the market at the relevant time. (v) That the Adjudicating authority erred in surmising and confirming demand for the year 1997-98, 1999-2000 and 2001-2002 as worked out in para 13 of the show cause notice on the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... melting/burning loss, transportations charges, job charges payable to job workers, Brass Scrap dealers trading profit. They were entitled to these abatements. The rate at which they valued the Brass Scrap for job work in their invoices was net of these permissible abatements. (viii) That the valuation of Brass Scrap by them in their invoices raised on job workers is in tune with the valuation of Brass Scrap as done by M/s. Batra Valves who are also central excise licensee. The rates of Brass Scrap in market as published in Economic Times matches the rates at which they cleared for job work. The demand for the period preceding one year from 20-3-2002, the date of show cause is time barred as there is no suppression of fact pertaining to valuation. The full facts were in the knowledge of the department as there central excise records were audited by the audit teams from time to time and audit did not point out any irregularity in valuation of Brass Scrap. (ix) That in the facts and circumstances of this case, they had not contravened any provisions of law. The issue being purely legal and hinging on interpretation, they ought not to have been penalized. The order of penalty is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... department either by filing Balance Sheets along with supportive Inventory Summaries or by specific intimation or otherwise and mis-represented/mis-stated the facts by substantially under-valuing the mixed Brass Scrap and contravened the provisions of the Rules ibid. with the sole intention to short pay duty. I find that main ground for rejecting the assessable value of the said scrap shown in the invoices of the Appellant No. 1 was the value of Brass Scrap reflected in the balance sheets of the Appellant No. 1. The Appellant No. 1 have submitted that they had mentioned the higher prices of the said scrap in Inventory Summaries of Balance Sheets of relevant period due to wrong nomenclature used in the balance sheet as the prices were in respect of Brass Rods and not Brass Scrap. They submitted that they had shown wrong value of scrap in the balance sheet on the belief that the purchase price of Brass Rods was to be reflected for balance sheet purposes. They further submitted that the department has derived the assessable value by deducting the excise duty from the value of the said prices of Brass Rods mentioned in the Balance Sheets as Brass Scrap undergoes many processes in proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rass Scrap. It has already been held in various judgment as in the case of Kores (India) Ltd. v. Commissioner of C.Ex., Hyderabad - 2004 (178) E.L.T. 901 (Tri.-Bang), Indian Aluminium Co. Ltd v. CCE, Belgaum - 2006 (198) E.L.T. 67 (Tri.-Bang.) and Deccan Enterprises Pvt. Ltd. v. Commissioner of C.Ex., Hyderabad - 2005 (190) E.L.T. 241 (Tri.-Bang.) wherein in similar circumstances the Hon ble Tribunal has held that there was revenue neutrality, intention to evade payment of duty cannot be alleged and extended period not invokable. I find that in the instant case also the Appellant No. 1 had been declaring all relevant particulars in the invoices of the said Brass scarp, same were being entered in the statutory records, R.T. 12 Returns being filed with the concerned Range offices and necessary periodical audit of the statutory records including balance sheets being conducted by the Audit parties of the department. In view of the revenue neutrality and the above facts and circumstances of the case, the suppression of facts with intention to evade payment of duty cannot be alleged by the department and extended period under Section 11A cannot be made applicable in the instant case in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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