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TMI Blog2018 (12) TMI 424X X X X Extracts X X X X X X X X Extracts X X X X ..... e Valuation Rules will not apply in a case where some part of the production is cleared to the independent buyers. The appellant has made clearances to independent buyers in addition to the Burdwan Unit. The values for clearances to Burdwan Unit are in line with the values adopted for independent buyers - there is no justification for demand of differential duty. Clandestine removal - shortage of sponge iron recorded at the time of stock verification - Held that:- Looking at the nature of the finished products i.e. sponge iron, which is in loose granule form, carrying out weighment physically is also impractical. In any case no evidence has been brought on record to allege that the goods recorded as shortage were cleared clandestinel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the department. The other issue involved in the present dispute is regarding the goods found short at the time of stock verification. The Central Excise Officers visited the Raniganj Unit on 23.02.2005 and undertook a joint physical stock taking of the finished goods in the presence of Shri Tapan Kumar Biswas, Manager and Authorised Representative and concluded that finished goods of a total quantity of 139.205 MT was short in comparison to the closing stock as per records. The show cause notice demanded Central Excise duty on the quantity of sponge iron found short by alleging that this quantity of the sponge iron was cleared clandestinely without payment of duty. The Original Authority ordered payment of duty on the goods found short. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of Bhusan Power Steel Ltd. vs. Commr. Of C.Ex, Kolkata-IV [2018(359) ELT 598 (Tri.-Kolkata)]. ii) In respect of the alleged shortage, the ld. Advocate submitted that the goods which are manufactured in the Raniganj Unit is sponge iron which is in loose form and stored in silos. He submitted that the Central Excise Officers had not undertaken any elaborate process of stock verification of such finished products but had summarily arrived at the shortage. Even though Shri Tapan Kumar Biswas, Manager had admitted such shortage in his statement dated 23.02.2005, he had specifically retracted the statement by filing affidavit before the Notary Public, Assansole on 10.10.2006. Accordingly, he submitted that the shortage cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ances to the Burdwan Unit and has accordingly proceeded to determine the value on the basis of cost of production. But the issue has been considered by the Larger Bench of the Tribunal in the case of Ispat Industries Ltd. vs. Commr. Of Central Excise Raigad (supra). The Larger Bench has observed as follows: 7. We also agree with the submission of the assessee that even if both the rules, i.e. Rule 4 and Rule 8, were applicable, it would only be logical to read and apply the various rules in the Central Excise Valuation Rules in a sequential manner. Though the Central Excise Valuation Rules, 2000 do not specifically prescribe such sequential application of various rules, the same, in our view, is the only reasonable way to read thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be that in isolation Rule 9(2) conveys some other meaning, but when it is read along with Section 14 of the Act, it must be given a meaning which is in accordance with the object of Section 14. The object of Section 14 is primary whereas the conditions in Rule 9 (2) are the accessories . The accessory must, therefore, serve the primary . 9. In view of what we have observed above, we answer the reference in the following terms : (a) the provisions of Rule 8 of the Valuation Rules will not apply in a case where some part of the production is cleared to independent buyers; (b) the provisions of Rule 4 are in any case to be preferred over the provisions of Rule 8 not only for the reason that they occur first in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has cleared 8459.064 MT of Sponge Iron to Burdwan unit which are valued at ₹ 5,04,75,235/-. Thus, average value per metric ton comes to ₹ 5,967/-. Total duty paid on 8459.064 MT of Sponge Iron comes to ₹ 80,76,038/-. During the same period i.e. 2002-2003, Raniganj unit has sold 195.330 MT of Sponge Iron at factory gate to unrelated buyers at factory gate at the aggregate sale price of ₹ 9,76,650/-. The sale price per metric ton comes to ₹ 5,000/-. Similarly, during 2003-2004, Raniganj unit has sold 9683.165 MT of Sponge Iron at factory gate to unrelated buyers at the aggregate sale price of ₹ 5,76,86,100/-. The sale price per metric tone comes to ₹ 5,957. 10. From the above it is seen t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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