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TMI Blog2019 (5) TMI 1343X X X X Extracts X X X X X X X X Extracts X X X X ..... value of the raw material becomes relevant only in case the material is damaged by M/s Sanghi and they have to reimburse the cost of the material to M/s KHDCL. This should reflect the true value of the goods because M/s Sanghi will be making up for any loss on their account at this price - the price in the delivery challan should, therefore, be considered as correct price of the raw material. The demand of Central Excise duty on the differential value is liable to be recovered under Section 11A(1) of Central Excise Act 1944 read with Rule 4,5,6 8 of the Central Excise Rules 2001-2002. Consequently, the deemed CENVAT credit, if any, also needs to be disallowed - the interest under Section 11AB also needs to be recovered from the respondent herein. Extended period of limitation - penalty - HELD THAT:- It is not in dispute that the appellant has declared the value which is lower than the value in the price declaration and therefore has clearly mis-declared the value and the same is liable to be recovered - Penalties also set aside. Appeal disposed off. - Central Excise Appeal No. 821, 727 of 2008 - Final Order No.30476-30477/2019 - Dated:- 9-4-2019 - MR. ANIL C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in the show-cause notice. He held that the difference between the price shown in the price declarations of KHDCL and price in the delivery challans is on account of transit risk amounting to 15%. In holding so, he relied on the statements KHDCL and Shri T Anjayya of M/s Sanghi. He further observed that foot note in the delivery notes explains that in case of short-supply or damage of goods, amounts will be recovered at the rate of grey fabrics as mentioned in the Delivery Challans. In para 25 of the impugned order he observed as follows: 25. I find that the component of transit risk in the price of grey fabrics furnished in the delivery note is a notional value depicting a kind of penalty in case of default by M/s Sanghi. In the instant case, by own submissions of M/s KHDCL, transit risk accounts for short supply, quality defects etc., and amount would be recovered from M/s Sanghi at the rates shown in the delivery notes and this rate of recovery has been arrived at by adding 15% to the standard procurement cost Eg. Standard procurement cost of grey shirting is ₹ 26/- per mtr. By adding 15% to the said cost, grey recovery cost was arrived at ₹ 29.90 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. There is no dispute as far as the processing charges are concerned. The only dispute is regarding the cost of the grey fabric supplied by M/s KHDCL for which a lower price is given in their price declarations sent to M/s Sanghi and a higher price is indicated in the delivery challans. The price declaration sent by M/s KHDCL read as follows: PRICE DECLARATION FOR EXCISE PURPOSE Sir, We submit below the following details for our goods sent to you for processing 01. Lot Number : -- 02. Description : Printed bedsheet material 03. Percentage : -- 04. Warp :2/20s 05. Weft :2/20s 06. Sort Number :1155 07. Processed Width :152 Cms 08. Fresh :₹ 49.50 Per 1 Mtr 09. Substandard :₹ 39.60 10. Seconds : ₹ 37.12 11. Soil or damaged :₹ 24.75 12. Fents :₹ 36.00 per Kg 13. Rags :₹ 28.00 14. Chindles :₹ 8.55 15. Including packing charges and no discounts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lan nor the price declarations nor the agreement nor any other documents presented before us would substantiate this claim. Clearly the learned Commissioner has erred in holding so merely on the basis of the statements and assertions made during the personal hearing before him. In view of the above, we find that the impugned order is not correct. We have also considered the submissions of the learned counsel that on an identical case, in the case of Sharda Synthetics Ltd (supra) the Tribunal Mumbai has ruled in favour of the assessee. Para-4 of this order reads as follows: 4. We have gone through the rival submissions. We find that the only ground raised in the show-cause notice for seeking to revise the assessable value was proposed adoption of the price declaration in the delivery note as the value of the grey fabrics. A perusal of para 55 and 56 of the Order-in-Original clearly shows that the said charges has not been sustained by the Commissioner. After having specifically not sustained on such charges, the Commissioner has gone on to confirm the demand on grounds not invoked in the show-cause notice. We find that the decision of the Hon'ble Supreme Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision contained in the first proviso to Section 4(1)(a) of the Act, it is difficult to understand as to how the CEGAT applied this provision. In the case of Sun Pharmaceuticals (supra), Hon'ble Supreme Court has observed as under:- 5. We may first take up Civil Appeal No. 3263 of 2009. This has to be allowed for simple reason that the aforesaid reasons given by the CESTAT in support of its view clearly reveals that CESTAT has gone beyond the show cause notice inasmuch as this was not even the case set up by the Department in the show cause notice. As may be seen in that particular case, the Tribunal has set aside the impugned order only on the ground that the impugned order has travelled beyond the scope of the show-cause notice. We find no such case in these appeals. Therefore, the ratio of the order of Sharda Synthetics does not apply. 8. In view of the above, we find that the demand of Central Excise duty on the differential value is liable to be recovered under Section 11A(1) of Central Excise Act 1944 read with Rule 4,5,6 8 of the Central Excise Rules 2001-2002. Consequently, the deemed CENVAT credit, if a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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