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TMI Blog2014 (12) TMI 113X X X X Extracts X X X X X X X X Extracts X X X X ..... vo adjudication - matter remanded back - Decided in favour of assessee. - E/4144/2003 - Final Order No. A/52395/2014-EX(DB) - Dated:- 5-5-2014 - G. Raghuram, President and Shri Rakesh Kumar, Member (T) Shri B.K. Singh and Vijay Kumar, Advocates, for the Appellant. Shri Jayant Sahai, Authorized Representative (DR), for the Respondent. ORDER The facts leading to filing of this appeal are, in brief, as under. 1.1 The appellant are engaged in manufacture of parts of Sprinkler Irrigation System covered under tariff sub-heading 8424.91 of the Central Excise Tariff and also the HDPE Pipes in coil form which was being classified by the appellant under sub-heading 391700 of the Central Excise Tariff. The HDPE pipes were being used captively from manufacturer of HDPE Couples pipes. The HDPE Coupled pipes falling under heading 84.24 are chargeable to nil rate of duty. The appellant were paying duty under protest on HDPE pipes manufactured by them and being cleared for captive consumption for use in the manufacture of HDPE Coupled pipes as HDPE Coupled pipes were chargeable to nil rate of duty and according to the Department for this reason, the HDPE pipes would not el ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the show cause notice has been issued only on the issue of valuation and no issue relating to classification of the goods has been raised in the show cause notice, the assessee cannot raise the issue relating to classification and accordingly this issue cannot be taken up for decision. The Commissioner accordingly decided the matter only on the basis of the allegation made in the show cause notice with regard to valuation. Against this order of the Commissioner, this appeal along with stay application has been filed. It appears that no decision was taken by the Tribunal in respect of appeal along with stay application filed by the appellant and for this reason, the appellant filed a Civil Writ Petition No. 5090/2013 before the Jaipur Bench, Hon ble Rajasthan High Court, which vide order dated 16th September 2013 directed the Tribunal to decide the appeal preferred by the petitioner or at least the stay application filed as early as possible, preferably within eight weeks from the date the parties appeared before it. Accordingly, this matter was heard for final disposal after waiving the requirement of pre-deposit. 2. Heard both the sides. 3. Shri B.K. Singh and Shri Vijay Ku ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r is not sustainable, that in any case, since the HDPE pipes being manufactured by the appellant are specifically designed for use with Sprinkler Irrigation System, the same would be correctly classifiable under heading 8524 where the rate of duty is nil and not under heading 3917 and in this regard he relies upon the judgments of the Tribunal in the cases of CCE, Aurangabad v. EPC Irrigation reported in 2002 (142) E.L.T. 630 (Tri. - Mumbai), Flow Tech Power v. CCE, Coimbatore reported in 2001 (130) E.L.T. 541 (Tri. - Chennai) and CCE, Ghaziabad v. Rungta Irrigation Ltd. reported in 2004 (167) E.L.T. 476 (Tri. - Del.), that though this plea had been made by the appellant in their reply to the show cause notice and in the course of adjudication proceedings and the same has been recorded as the appellant s defence in the impugned order-in-original, the Commissioner has wrongly not considered this plea on the ground that the issue of classification had not been raised in the show cause notice, as the show cause notice has been on the basis of valuation issue, that this view of the Commissioner is totally incorrect, that even if the show cause notice demanding differential duty had bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... HDPE pipes manufactured by them are specifically designed for use in Sprinkler Irrigation System and, hence, in accordance with the judgments of the Tribunal in the cases of CCE, Aurangabad v. EPC Irrigation (supra), Flow Tech Power v. CCE, Coimbatore (supra) and CCE, Ghaziabad v. Rungta Irrigation Ltd. (supra), the same would be classifiable under heading 8424 where the rate of duty is nil and, therefore, the question of payment of duty does not arise, but this plea of the appellant was not considered by the Commissioner on the ground the show cause notice had been issued only on the valuation issue. 7. Coming to the second plea of the appellant, the Commissioner has not given any finding and has not even considered the question of classification on the ground that the same had not been raised in the show cause notice and the show cause notice was only on the basis of valuation issue and, therefore, the appellant cannot raise this issue at the time of adjudication. We are of the view that the Commissioner s decision of not considering the classification issue is not correct, as show cause notice after all was for demand of duty though on the ground of undervaluation, and if it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the goods under Section 4 while the dispute here is what is the cost of production of the goods and how it is to be determined. The value of the goods for the purpose of assessment of duty and the cost of production are different. In this case, while the assessable value of the goods is cost of production plus manufacturer s profit during period till 30-6-2000 and 115%/110% of the cost of production during period w.e.f. 1-7-2000, the cost of production is that which has to be determined in accordance with the principles of costing i.e. CAS-4 standard of ICWAI and for determining the cost of production, Apex Court s judgment in case of UOI Ors. etc. etc. v. Bombay Tyre International Ltd. etc. etc. (supra) has no application. In view of this, the Commissioner s order with regard to the issue of valuation is also incorrect and the matter has to be remanded for de novo adjudication. 9. In view of the above discussion, the impugned order is set aside and the matter is remanded to Commissioner for de novo adjudication in terms of our directions in this order. In the de novo proceedings, the Commissioner must also consider the appellant s plea with regard to classification of the g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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