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TMI Blog2007 (4) TMI 106X X X X Extracts X X X X X X X X Extracts X X X X ..... or clearance of these goods. Investigations indicated that in 1997-98, APL had apparently cleared these products to their two sister units paying duty on incorrect values based on ad hoc cost, undervaluing the goods and evading payment of excise duty. It was tentatively found that during the year 1997-98, APL had adopted incorrect values based on material cost plus 10% of such cost to wards overheads and profit margin for clearances of 6-APA from 21-5-97 to 8-6- 97 and from 10/97 to 3/98, and for a clearance on 5-9-97 of 7-ADCA. Such clearances of 6-APA and 7-ADCA during 1997-98 were tentatively determined to involve duty evasion to the extent of Rs 51,80,003 57 Accordingly, a Show Cause Notice was issued to demand the above amount of duty, interest due thereon and to impose penalty on the assessee. 3. The assessee contested the proposals. They claimed that they had regularly filed price declarations under Rule 173C, removed the goods under proper invoices ad had filed RT-12 returns and invoices. As the goods had been cleared to sister units, there could be no allegation of misdeclaration of neither facts nor intent to evade payment of duty. Therefore longer period could not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the material period 21-05-97 to 31-3-98, APL had adopted incorrect values based on ad-hoc cost for clearances of 6-APA (except between 9-7-97 and 26-8-97) and 7 ADCA. He found that the appellants had made deliberate efforts to evade payment of duty and longer period was invocable in terms of proviso to Section 11A (1). Accordingly he passed the impugned order demanding Rs. 50,55,615/- under Section 11A(1), imposing equal amount of penalty under Section 11AC and demanding interest under Section 11AB of the Act. 5. In the appeal before us, the assessee cited the ratio of the U.T. Limited case where the Tribunal had decided that when two manufacturing units be longed to a single company having a common Balance Sheet and one of them cleared goods to the other, it logically followed that the duty paid by one unit and the credit thereof was taken by the other unit, there would be no intention to evade payment of duty. They had adopted the price for a sale of 6-APA made on 27-1-97, for clearances made for a short period from 4/97 to 5-5-97 in 97-98. They had followed the cost-based price for the clearances in the rest of the year. The one sale on 5-7-97 in the year 1997-98 as we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... covered by invoice No. 102/5-7-97 for assessment of clearances during the period 29-8-97 to 30-9-97. According to the appellants the Commissioner had followed an incorrect procedure. The appellants relied on Tribunal's decisions in (i) Rallis India Pvt. Ltd. v. CCE [2006 (201) E.L.T. 429 (Tri.)] and (ii) National Aluminium Co. Ltd. v. CCE [2000 (125) E.L.T. 519 (Tri.)] in support of this plea. For the alleged short levy in 97-98, Show Cause Notice was issued on 2- 9-99 i.e. above eleven months beyond the normal period of six months. They had filed price declarations during the material period which had been acknowledged by the Department. The sale invoices had also been filed with the Department along with RT 12 returns. The demand was therefore barred by limitation. The appellants relied on he judgment of the Tribunal in Kores ( India ) Ltd. v. CCE [2004 (178) E.L.T. 901 (Tri.-Bang.)] in respect of this claim. It was held in that decision that despite the fact that the appellants had not determined the correct value of each grade of Barium Carbonate in that case, there was revenue neutrality and intention to evade payment of duty could not be alleged nor extended peri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n acknowledged by the Department. Whatever duty was paid by the Pondicherry unit for the impugned clearances would have been availed as Modvat credit by its sister units. In such a revenue neutral situation the appellants cannot be alleged to have had an intention to evade payment of duty. As the assessee had filed price declarations and no willful suppression of facts or misdeclaration on the part of the assessee could be alleged, the demand is barred by limitation. For clearances of 6-APA during the period 21-5-1997 to 8- 6-1997 and 10/97 to 3/98, and for the clearance of 7-ADCA on 5-9-97, the Commissioner computed the assessable value following the guidelines contained in the Board's Circular dated 30-10-96. However, he adopted average of prices for two sales, one in 96-97 and another in 97-98 and also the percentage of profit margin in 97-98 to determine the value for assessment of clearances of 6-APA. Board's Circular had prescribed that the percentage of profit margin should be worked out with reference to the previous year's transactions to determine the assessable value on the basis of cost of the relevant year of clearances. Therefore, the Commissioner had ascertained the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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