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TMI Blog2009 (5) TMI 801X X X X Extracts X X X X X X X X Extracts X X X X ..... rnasar to Sardar Shahar. During the period from April 1998 to October 2002, the Respondent supplied PSC pipes to their Secunderabad unit which used the same for laying the pipe line. During this period they paid duty on these pipes on the basis of cost of production plus 10% and in this regard they had also filed price declaration. The period of dispute from April 1998 to 30-6-2000 is governed by the old section 4, as it stood during the period prior to 1-7-2000, read with Central Excise Valuation Rules, 1975 (hereinafter referred to as CEVR, 1975) and the period w.e.f. 1-7-2000 is governed by the new Section 4, which came into force w.e.f 1-7-2000 read with Central Excise Valuation Rules, 2000 (hereinafter referred to as CEVR, 2000). The Department was of the view that during the period from April, 1998 to 30-6-2000, in accordance with the provisions of Rule 6(b)(ii) of CEVR, 1975, the duty should have been paid by the Respondent on the basis of cost of production plus actual profit which was to the tune of about 24.57% and during the period from 1-7-2000 onwards, in accordance with the provisions of Rule 8 of the CEVR, 2000, the duty should have been paid on the value equal to 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any other assessee or if such value is not available, on the cost of production or manufacture including profit, if any, which the assessee would have normally earned on the sale of such goods; that since in this case the PSC pipes of 1100 mm dia were being manufactured for specific use of Public Health and Engineering Deptt., Rajasthan for laying pipe line and as such the value of comparable goods produced by the Respondent or other assessees was not available, the assessable value should have been determined during the period till 30-6-2000 on the basis of the cost of production plus the profit which the Respondent would have normally earned on the sale of such goods; that since the Respondent instead of adding actual profit which was much higher value, have added only 10% profit, the demands for differential duty have been rightly confirmed by the Asstt./Joint Commissioner and the Commissioner (Appeals) s Order setting aside these demands are not correct; and that so far as the duty demand for the period from 1-7-2000 onwards is concerned, during this period the old Section 4 along with the CEVR, 1975 had been replaced by new Section 4 read with CEVR, 2000 and as per the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the formula prescribed by the Cost Accounts Branch of the Deptt. of Expenditure, that the Respondents profit during the years 1997-98, 1998-99 and 1999-2000 was 14.14%, 13.62% and 12.50% respectively and during the year 2000-01 there was loss, that during the entire period of dispute the duty demand has been calculated by arbitrarily taking the profit margin as 24.57%; and that if the duty demand is worked out as per the Board s Instructions, the quantum would be much less. He also pleaded that the show cause notice dated 13-7-2001 demanding allegedly short paid duty amounting to Rs. 13,00,358/- for the period from April, 1998 to December, 1998 is time-barred as - (a) prior to issuing the show cause notice invoking extended period under the proviso to Section 11A, four show cause notices dated 28-8-1999, 13-1-2000, 14-3-2000 and 22-8-2000 for the period from Jan., 1999 to May, 2000 had been issued on the basis of the same facts under normal limitation period and, therefore, on the basis of the same facts, the SCN dated 13-7-2001 demanding duty for the period from April, 1998 to December, 1998 could not be issued invoking extended period by alleging suppression of facts and in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecunderabad cannot be treated as in the course of sale. But since the goods cleared by Respondent to their Secunderabad Unit have not been sold by the Secunderabad Unit but have been used by that unit for laying pipelines for Public Health Department, Rajasthan, and since these goods have not been used for captive consumption for production or manufacture of other articles, the Rule 6(b) as such would not be applicable. Since M/s. Bhoorathnam Co., Jaipur and M/s. Bhoorathnam Co., Secunderabad are one entity, they cannot be treated as related persons and therefore, Rule 6(c) of CEVR Rule, 19756 is also not applicable. We are, therefore, of the view that the assessable value in this case has to be determined under Rule 7 of CEVR, 1975 for the period till 30-6-2000 and under Rule 11 of CEVR, 2000 for the period subsequent to 30-6-2000. Under Rule 7 of CEVR, 1975/Rule 11 of CEVR, 2000 the value has to be determined by the best judgment method consistent with the principle and general provisions of the Valuation Rules and sub-section (1) of Section 4 of the Act. For this purpose, however, this matter has to be remanded to the Original Adjudicating Authority. 5. Another point raise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dopted instead of uniform profit margin of 10%. In view of these circumstances, we are of the view that so far as show-cause-notices dated 13-7-2001 is concerned, the same is time-barred, and CCE (Appeals) s order setting aside the Joint Commissioner s Order dated 22-1-04 on the ground of time-bar is correct. 6. In view of above discussion, we- (a) uphold the part of the impugned order-in-appeal dated 18-6-04 in so far as it sets aside the Jt. Commissioner s order-in-original dated 22-1-04 in respect of duty demand for period from April, 1998 to Dec., 1998 and accordingly the Revenue s appeal No. E/4551/04-NB against this part of the impugned order is dismissed; and (b) set aside the remaining part of the impugned order-in-appeal dated 18-6-04 and also the impugned order-in-appeal dated 28-6-04 in respect of duty demands for the period from Jan., 1999 to May, 2000 and Jan., 2002 to Oct., 2002 and remanded the matter to the Assistant Commissioner for de novo adjudication for re-determining the assessable value of the goods cleared by the Respondents, under Rule 7 of CEVR, 1975/Rule 11 of CEVR, 2000 and re-determining the differential duty and also the quantum of penalty under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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