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TMI Blog2003 (1) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant filed classification list and price list for that 100% Hydrochloric acid on 16-4-1979 and 17-4-1979. Those lists were approved by the appropriate officer after he revised the value to Rs. 175 per metric tonne. The price list filed as also the list that was approved mentioned the strength of the acid as 100%. Though the appellant had claimed the cost of production per metric tonne of that concentration as Rs. 25.27, the appropriate officer had revised that upward to Rs. 175/-, by relying upon the sale which the appellant had effected a short time prior to 1-3-1979 on which date the exemption was withdrawn. On 25-8-1981, the price of Rs. 175/- was revised upward to Rs. 205/- per metric tonne for the period from 1-3-1979 to 18-6-1980 and to Rs. 225/- per metric tonne from 19-6-1980 onwards. Such upward revision was effected by taking into account the price charged by another manufacturer, Mettur Chemicals, which also produced hydrochloric acid. Under Rule 6(b)(i) of the Central Excise Valuation Rules, 1975, it is open to the Department to adopt the price of similar goods sold by other manufacturers in cases where excisable goods are captively consumed by the assessee which manu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se notice, the claim so made for duty was at the rate of Rs. 220.56 per metric tonne of hydrochloric acid at 33% concentration, which in effect meant three times that figure for hydrochloric acid of 100 $ concentration. A reply was sent by the appellant contesting the allegations of suppression, in which it was also pointed out, inter alia, that the same allegation of suppression had been made for the earlier period also and that that issue was pending adjudication. 6.The Assistant Commissioner, however, proceeded with the adjudication and made the order dated 31-5-1991, wherein he held, inter alia, thus :- "The allegation made in the show cause notice that the RGI was not maintained as per the law has not been satisfactorily explained by the assessee. Taking the Excise procedure with licensing procedure does not give any extra powers to the assessee to maintain the Central Excise records as they like. Probably to show that it was not a mistake; but in practice the assessee continued to indicate the concentration as 100% in addition to 30-33%. The continual does not legalise the wrong procedure adopted. I am not discussing this point, since the matter is subjudice." The Assis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain on 18-2-82, stock taking had been conducted and the closing stock of HCL has been ascertained with not discrepancies. In the above background, could it be alleged that the Department was not aware that the assessee is recording production on 100% basis and that the approval given by the Department for the assessable value MT was not on 100% basis but on the actual diluted quantity. To clarify, 100% basis would mean that although the concentration of the hydrochloric acid might be varying from 30 to 33 or 35%, the production is recorded by dividing the above quantity with the factor of 3.28. For example, if 328 tonne of a concentration of hydrochloric acid varying between 30 to 35% is manufactured in a day, it will be accounted as 100 tonne of hydrochloric acid on 100% basis. This was the practice adopted by the assessee and this was known to the Department. Therefore, when the Department approved the price for one MT, they should have made it clear as to whether the MT represents 100% basis hydrochloric acid or 30 to 35% concentration of hydrochloric acid. The prices should have been approved accordingly. In addition during the relevant period RT 12s have been regularly filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng with the inert gas are vented out through the discharge side of the tail end blower. It is the assessee's case that absorption of HCL fumes with water is an exothermic reaction and hence the HCL absorber is necessarily cooled by water. The manufacturing process has been filed with the Department in November 1979 itself which clearly disclosed the formation of HCL of 30 to 33% concentration and that the other materials are also produced. It shows about the correct manufacture and entries which have been checked by the Inspector of Central Excise. Therefore, it cannot be said that Department was not fully aware of the manufacturing process and the assessee had suppressed any material facts with an intention to evade duty. There has been scrutiny of documents on several occasions and it is only at a later date the department intended to change their view regarding tariff classification. The Commissioner has duly examined the matter and clearly upheld the assessee's contention that there was no misdeclaration, misrepresentation or suppression of material facts in the matter with an intention to evade duty. The order is legal and proper...." 9.Thus, the Commissioner as also the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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