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TMI Blog2010 (8) TMI 906X X X X Extracts X X X X X X X X Extracts X X X X ..... tory is consumed by their own sister concern, provisions of Rule 8 of the said rules will apply. The appellants have been submitting the cost certificates to the authorities. The said cost certificates were of the cost of production on the manufacture of such goods. Both the lower authority’s finding that the said CAS-4 certificates could not be computed for each consignment at the time of clearance, does not mean that the assessee is at liberty to remove the goods to a related person on an approximate value, seems to be incorrect as if it is undisputed that the processed yarn is consumed by the related/sister concern for further manufacturing of the goods, provisions of Rule 8 of the said rules would clearly apply. Since the cost certifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacture of other articles on behalf of the appellants. The appellants have been discharging the duty liability on the said goods based upon and in accordance with Rule 8 of the Central Excise Valuation Rules, 2000 (herein after called as Rules). On scrutiny of the annual cost audit report of the assessee, the lower authorities felt that the assessable value adopted by the appellant for discharging duty liability for clearances of cotton yarn to their own unit, was found to be lesser, compared to the value adopted. Show cause notices were issued to the assesseee demanding differential duty on such clearances along with demand for the interest and proposal for imposition of penalties. The adjudicating authority confirmed the demand, imposed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of Rule 11 of the Central Excise Rules read with the principle laid down by the Hon ble Supreme Court in the case of Ujagar Prints etc. v. UOI [1989 (39) E.L.T. 493 (S.C.)] and further clarificatory judgment. It is his submission that the value determined in terms of Rule 11 of the said rules would in fact be less than the value considered by the assessee for the discharge of the duty liability. It is his submission that the larger bench decision of the Tribunal in the case of Prafful Industries Ltd. v. CCE, Mumbai [2000 (118) E.L.T. 97 (Tri.-LB)] will be applicable. It is his submission that in case of valuation of goods on job work basis any relationship between two companies is immaterial. He would also submit that the question of limi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the differential duty after getting the cost audit report. It is his submission that the responsibility is entirely on the assessee and if they did not do it, it is clear case of malafide with intent to evade duty. He would submit that the job work valuation as per CBEC Circular No. 619/10/02-CX., dated 19-2-2002 which is relied upon by the appellant is also to be done under provisions of Rule 11 read with Rule 6 and consequently the liability has been correctly upheld by the first appellate authority. 5. We have considered the submissions made at length by both sides and perused the records. The issue involved in this case is whether the value adopted by the appellant for the goods cleared on their own account and on job work basis bas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said rules will apply. The appellants have been submitting the cost certificates to the authorities. The said cost certificates were of the cost of production on the manufacture of such goods. Both the lower authority s finding that the said CAS-4 certificates could not be computed for each consignment at the time of clearance, does not mean that the assessee is at liberty to remove the goods to a related person on an approximate value, seems to be incorrect as if it is undisputed that the processed yarn is consumed by the related/sister concern for further manufacturing of the goods, provisions of Rule 8 of the said rules would clearly apply. Since the cost certificates which were submitted by the assessee before the clearances of the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be adopted for discharge of duty liability. To our mind the reliance placed by the lower authorities on the cost of production of the products i.e. processed yarn seems to be improper as that includes various other expenses which are not to be considered for the purposes of arriving at the cost of production of the processed yarn cleared for captive consumption or on job work basis. In view of this, we are of the considered view that the cost adopted by the assessee based upon CAS-4 certificate of the Cost Accountant is correct and the impugned orders holding otherwise are unsustainable. 7. Before we part with the cases, we note that the duty paid on such processed yarn cleared by appellant is being taken as Cenvat credit, by their own s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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