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TMI Blog2009 (2) TMI 623X X X X Extracts X X X X X X X X Extracts X X X X ..... ed below the market price and appellant allegedly failed to declare the price of scrap correctly cleared to job worker on payment of duty for conversion into rods/bars as per Central Excise (Valuation) Rules, 2000 (hereinafter referred to as Valuation Rules); that during the course of investigation, statements of Shri S.S. Vanarase, Excise Officer and authorized representative of the appellant and Shri V.V. Deshpande, Factory Manager of the job worker were also recorded; that the department also received letters dated 2-8-2006 and 18-7-2006 from M/s. Minerals and Metals Review (MMR) Weekly; that on the basis of the above, it was observed that the appellant determined the value at Rs. 62/- per kg which was not changed from February 2002 to June 2006; that Shri V.V. Deshpande, in his statement, stated that brass scrap received for conversion from the appellant as well as scrap purchased from open market appeared of same variety and cannot be distinguished or identified separately since these were not stored separately and, therefore, uniform rates were charged by the job worker for goods cleared on conversion basis as well on outright basis and the duty is paid accordingly; that pric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the department deliberately. (ii) that the Additional Commissioner has not followed the principles of natural justice inasmuch as he did not call Shri S.A. Govekar and Shri V.V. Deshpande for cross-examination as requested by the appellant while replying to the SCN as well as at the time of personal hearing; (iii) that the scrap generated in the appellant s factory and cleared on payment of duty cannot be equated with scrap available in the market; (iv) that the appellant were clearing the scrap at Rs. 62/- per kg was well known to the department from audit point i.e. 2005 or even earlier from 2003 and hence larger period invoked is illegal and the appellant relies on the following decisions :- (1) National Torch Tubes v. CCE, Mumbai-V [2005 (188) E.L.T. 343 (Tri.-Mumbai)]. (2) TISCO Ltd. v. CCE, Jamshedpur [2006 (199) E.L.T. 855 (Tri.-Mumbai)] (3) Aurobindo Pharma Ltd. v. CCE, Trichy [2007 (216) E.L.T. 389 (Tri.-Chennai)] (4) India Engineering Indus Ltd. v. CCE, Mysore [2008 (221) E.L.T. 295 (Tri.-Chennai)] (5) Triveni Engineering Ind. Ltd. v. CCE, Mysore [2007 (213) E.L.T. 578 (Tri.-Bangalore) = 2007 (6) S.T.R. 353 (Tri.-Bang.)] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tral, in other words, if they pay higher duty, it is taken as Cenvat by the job worker; (xii) that the scrap obtained from open market and their scrap is altogether different and has its own value and Shri Deshpande in his statement has nowhere committed that brass scrap purchased from open market and that of the appellant appeared of the same variety; (xiii) that the scrap generated in their factory contain impurities like dust, oil, lubricants used and so on and as such their scrap cannot be compared with that available in the open market. 3. P.H. was held on 3-2-2009 at 5.30 PM. S/Shri V.S. Khanvilkar and J.H. Tamhankar, Consultants authorized by the appellant appeared before me. None appeared from the department s side despite intimation. During the hearing, both reiterated the submissions made in the appeal memorandum. They also filed written submissions. 4. I have gone through the case records including record of PH and the various decisions relied upon by the appellant. After waiving pre-deposit, I take the main appeal itself for final decision. In the instant case, the department during the scrutiny of the records of the appellant observed that the appellant cleare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inciples of natural justice; that the demand is time barred inasmuch as the issue of price variation was pointed out by the auditors while scrutinizing their records during the year 2005 and the discrepancies were communicated during February 2006. Whereas the SCN was issued during July 2007 and accordingly SCN issued after a period of one year from the visit of audit is time barred; that the appellant relies on the decisions mentioned at para 2(iv) (vi) supra; that the appellant further claims that the whole issue is revenue neutral. 4.2 There is no dispute with regard to the price of scrap which was sold at Rs. 62/- per kg during the period from 02/2002 to 06/2006. But the dispute is with regard to the similarity of the scrap which was under dispute with that of scrap procured from the open market. The department s main allegation is that when price of scrap was going up in the market the appellant was clearing the scrap on payment of duty to the job worker by fixing the rate at Rs. 62/- per kg. The department s main conclusion is that the price circulated in MMR and the price at which the job worker procured from open market are more than the price at which the appellant was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the job worker is mixing the scrap received from the appellant as well the one purchased from the open market, manufacturing the same and adopting the same assessable value both for the goods cleared to the appellant as well as to others. But unfortunately, he was not produced before the appellant for cross examination. The cross examination of Shri Govekar is also important since there are contradictory remarks with regard to inclusion and exclusion of taxes in the price of scrap. In other words, with regard to price of material, purchased from National Aluminium Co. Ltd., Hindustan Copper Ltd. Hindustan Zinc Ltd. etc. the prices are exclusive of excise duty and other taxes and in the case of scrap procured from domestic market, there is no such remarks and thus it follows that the price is inclusive of excise and other taxes. Under the above circumstances, this case cannot be moved further. In the result, due to violation of principles of natural justice, the allegations with regard to the undervaluation made by the lower authority is not sustainable. 5. In addition to the above, the appellant has also come up with alternative plea - i.e. revenue neutral. According to the app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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