9911796707
TMI Blog2016 (5) TMI 1071X X X X Extracts X X X X X X X X Extracts X X X X ..... .2004, issued on 09.11.2004 passed by the Commissioner of Central Excise, Jamshedpur. Under this Order-in-Original Adjudicating authority has confirmed a demand of Rs. 2,00,07,358/-(Rupees Two Crore Seven Thousand Three Hundred and Fifty Eight only) against Appellant M/s.The Tinplate Co. of India Ltd. (TCIL) along with interest and imposed equivalent penalty. A penalty of Rs. 1,00,000/-(Rupees One Lakh only) has been imposed upon Appellant M/s.Tata Iron & Steel Co.Ltd.(TISCO), Jamshedpur and penalty of Rs. 50,000/-(Rupees Fifty Thousand only) has been imposed upon Appellant Shri B.Muthuraman, MD of M/s.Tata Iron & Steel Co.Ltd.(TISCO). A penalty of Rs. 20,000/-(Rupees Twenty Thousand only) has been imposed upon Appellant Shri M.K.Jha, Deput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are required to be subject to valuation under Rule 11 of the Central Excise Valuation Rules, 2000 and that the provisions of Rule 8 of these Rules are not applicable to such goods manufactured on job-work basis. That the same view stands upheld by the Apex Court in the case of Commissioner of C.Ex., Goa vs. Cosme Farma Laboratories Ltd. [2015 (318) ELT 545(SC)] where it was held that valuation in case of goods manufactured under job-work mechanism has to be decided on the basis of Apex Courts decision in the case of Pawan Biscuits Co. (Pvt.) Ltd. v. Commissioner of Central Excise, Patna (supra). That the demand raised for the period 01.07.2000 to 09.02.2001 based on 115% of the cost of manufacture of FHCR Coils comes to Rs. 85.00 Lakhs ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entage as 92%. 4. Ld.Advocate also argued that demand with respect to inward freight incurred on raw materials and outward freight incurred on the finished goods sent to M/s.TISCO have been added to arrive at the assessable value. It is the case of the Appellant that outward freight incurred for transporting finished goods is not required to be added to the assessable value and the excess duty demanded on such inclusion of outward freight comes to Rs. 17.00 Lakhs (approx.) which is not demandable. That another demand of Rs. 2.00 Lakhs (approx.) has been demanded excess in the Show Cause Notice which is due to calculation errors. 5. On the issue of imposition of penalties Ld.Advocate relied upon the case law of Commr. of C.Ex. & Cus., Vado ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icating authority. 7. Heard both sides and perused the case records. Main issue involved in these Appeals is regarding valuation of goods manufactured by M/s.TCIL on job-work basis for M/s.TISCO. Following issues are required to be decided in these Appeals:- 1) Whether valuation of goods manufactured on job-work basis are required to be done @ 115% of the cost of manufacture of FHCR Coil under Rule 8 of the Central Excise Valuation Rules during the period 01.07.2000 to 09.02.2001? 2) Whether demand of Rs. 17.00 Lakhs (approx.) calculated by the Adjudicating authority by taking the yield percentage as 92% was correct? 3) Whether outward freight incurred by M/s.TCIL on transporting finished goods from the factory is required to be inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raised on the basis of 115% for the period 01.07.2000 to 09.02.2001 is required to be set aside. 9. On the issue of calculation of demand based on a maximum yield of 92% it is observed that as per the conversion agreement between M/s.TCIL and M/s.TISCO minimum yield has been considered to be 92% but at the same time the contract also mentions it clearly that yield shall be calculated on actual basis. Appellant has brought on record the documents conveying that yield during the relevant period of demand varies from 94.86% to 95.42%. Accordingly quantification of demand, if any, has to be done by taking into consideration the percentage of actual yield during the period under consideration. However, such a quantification is required to be d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Appellant before the Adjudicating authority. 11. So far as imposition of penalties upon the Appellants is concerned, it is observed that Appellant M/s.TCIL was aware of the fact that cost of raw materials supplied by M/s.TISCO was on a higher side. M/s.TCIL took up the matter with M/s.TISCO regarding calculating duty liability based on higher value of raw materials supplied. This correspondence regarding payment of duty at higher cost of raw material supplied with M/s.TISCO was also initiated only after department started investigating into the matter. At that stage Appellant M/s.TCIL was required to approach the department as soon as they realized higher cost of raw material supplied. Accordingly penalty is required to be impose ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
