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TMI Blog2023 (4) TMI 970X X X X Extracts X X X X X X X X Extracts X X X X ..... be the basis for working out the overhead charges . The Appellant arrived at the overhead charges as a percentage of wages which appears to be more appropriate than adopting raw material cost, to arrive at the overhead charges . The Appellant has already paid duty on the basis of the cost arrived at based on the method cited above. Thus, there is no under-valuation in the costing of the product adopted by the Appellant. Accordingly, the demand does not survive. As the demand is not sustainable, the demand of interest and penalty also not sustainable. Extended period of limitation - HELD THAT:- Since the issue is already held that on merit itself the demand is not sustainable, issue of Limitation is not examined further. Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Duty amounting to Rs.14,91,576/- along with penalty under Sec.11AC and interest under Sec. 11AB of the Central Excise Act, 1944 invoking extended period of limitation in terms of proviso to Section 11A ibid. 2. The Appellant submitted that there are various methods of costing principles and they relied on Labour Cost basis for determining the value of such overheads in their factory. The departmental calculation is not tenable on the ground that this calculation is not based on any system. Accordingly, they argued that the demand made in the Notice was not tenable. They also raised the issue of invocation of extended period as Central Excise returns were regularly filed by them, as well as audit teams were regularly visited their facto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or job workers. Notional profit is to be taken as a percentage of previous year s gross profit. I am of opinion that Costing for the purpose of captive consumption is not open to individual preferences and conveniences. Regarding the additional submission of the appellant at the time of Personal Hearing discussed at Para-6, I opine that the basis of profit element on components and the basis of calculation of labour costs etc. should be gone into by the adjudicating authority for correct quantification. 8. Considering the above facts, I am of the opinion that the adjudicating authority in his order has not considered the merits of the case and facts on records. Therefore, I am in agreement with the reviewing authority that the adjudicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Adjujdicating authority has dropped the demand on merits as well as on the ground of limitation. The finding of the Ld. Adjudicating authority is reproduced below:- I therefore find that the allegations leveled by the department against the noticee are not based on solid arguments. When the noticee to free to adopt any mode of Cost Accounting policy for the purpose of valuation of the costs of overheads, there should have been more efforts from the point of view of the department to substantiate the demand, but, I find that there is no sufficient cause/ground to uphold the instant demand and I am inclined to drop the charges. Since the basic issue fails, I do not find any justification to impose interest or penalty either. I also fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hority and the Revenue has appealed against the Order-in-Appeal only on this ground of remanding to the matter back to the Ld. Adjudicating authority. We find that the Adjudicating Authority has not taken any decision based on the direction of the Commissioner ( Appeals ), since Department s Appeal is pending before us. As the Appellant is also before us against the O-i-A and the issue is pending for a long period, we take up both the Appeals together to decide the Appeals on merit. 11. During the time of hearing, the Appellant stated that the Department has raised the demand in the Notice on the ground of non inclusion of overhead charges in the costing of the goods cleared for captive consumption as well as to other job workers. . He s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urvive. As the demand is not sustainable, the demand of interest and penalty also not sustainable. 13. We find that the Appellant has also raised the issue of Limitation and argued that the demand is not sustainable on the ground of Limitation. They contended that invocation of extended period is not sustainable in this case as they were regularly filing Central Excise returns and disclosed all the information to the Department in the Returns. Also audit teams have regularly visited their factory and conducted Audit of their accounts. As they have not suppressed any information from the Department, the demand made in the Notice by invoking extended period under proviso to Section 11A is not sustainable. We find merit in the argument of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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