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TMI Blog2018 (8) TMI 1565X X X X Extracts X X X X X X X X Extracts X X X X ..... t, the extended period of limitation invoked in these proceedings cannot sustain - The show cause notices have been issued in 2006 invoking extended period alleging suppression of facts. The impugned order cannot sustain as the demand is hit by limitation - appeal allowed - decided in favor of appellant. - Appeal Nos. E/30 & 31/2009 - Final Order Nos. 41812-41813/2018 - Dated:- 27-3-2018 - Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical) Ms. S. Vishnu Priya, Advocate for the Appellant Shri S. Govindarajan, AC (AR) for the Respondent ORDER Per Bench Appeal Nos. E/30 31/2009 have been filed by Unit - I II respectively of M/s. Sambandam Spinning Mills Ltd. Both these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en the matter came up for hearing, ld. counsel Ms. S. Vishnu Priya made oral and written submissions, which can be broadly summarized as follows:- 2.1 The appellants have cleared the goods after payment of duty on cost and conversion charges. Also, apart from this, the proviso to Rule 9 only carves out an exception to that which falls within the main part of Rule 9. If the main part of Rule 9 does not cover clearance to interconnected parties, the proviso cannot operate. It is well settled that a proviso cannot be certified as expanding the main part. 2.2 Rule 8 has been erroneously applied in their case. 2.3 Rule 11, on the other hand, makes it clear that the value should be determined using reasonable means consistent with the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parties are related. This order held the field during the period of dispute. It is only there after that the judgment of the Hon'ble Supreme Court in S Kumars case was delivered in 2005 (190) ELT 145 (SC). The judgment was delivered by the Hon'ble Supreme Court on 21.11.2005. When the appellants had conducted their affairs on the faith of the circular and the judgment of the Tribunal, there was no basis to invoke extended period of limitation. Extended period of limitation cannot be invoked when there is uncertainity in the legal position. She relied on the decision in Duraippa Lime Products Vs. CCE, Madurai reported in 1998 (104) ELT 505 (Tri- Mad). 2.8 That there is no willful suppression on the part of the appellants. When the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inal authority were set aside by the Commissioner (Appeals) in order dated 28.4.2005. The lower appellate authority therein took the view that the adjudication of assessable value by the original authority is contrary to the decision of the Hon'ble Supreme court in the case of Ujagar Prints Ltd. 1989 (39) ELT 493 (SC) and also contrary to the CBEC Circular dated 19.1.2002. He therefore held as under:- 7.4 Unless it can be shown that the cost of manufacture itself as declared by the appellant is incorrect or is not acceptable for the reason that the manufacturing cost was depressed, there would be no reason to add the same to the value. In the appeals at hand when there was no sale the assessable value has ..aside. Inasmuch as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld that since the appellant therein was related to the principal manufacturer undertaking interconnected activity, the case goes out of the scope of Rule 9 of CEVR, 2000 and the ratio of Ujagar Prints (supra) requires to be followed attracting Rule 10(b) of the CEVR, 2000. The appeal filed by department against this decision was dismissed by the Hon'ble Supreme Court as reported in 2017 (349) ELT A157 (SC). 5.5 Discernibly, the Tribunal in S. Kumars Ltd. 2000 (117) ELT 439 analyzed the Ujagar Prints judgment and had held that there is no distinction between fabrics processed for related persons and others and that valuation of fabrics processed on job work basis should be carried out on the basis of cost of product as laid down in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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