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TMI Blog2004 (9) TMI 189X X X X Extracts X X X X X X X X Extracts X X X X ..... on as to why the goods in question are sold at a lower price to Nasik unit compared to others, the department is right in adopting the maximum price at which the goods are sold during the relevant period. In respect of goods which are exclusively sold to Nasik unit, the department determined the price under Rule 6(b)(ii) of Valuation Rules. We see no reason to find fault with this. We do not find any reason as to why that the maximum price should not be adopted when once it is known that the goods involved therein are identical to the goods sold to the Nasik unit. The Hon'ble Supreme Court in the case of Amco Battery Ltd.[ 2003 (2) TMI 66 - SUPREME COURT] clearly ruled that when an assessee acts on the bona fide belief that certain goods are not excisable particularly when such goods are modvatable, suppression cannot be alleged. Amco Battery deals with a case where the inputs and the final products are manufactured in the same factory. Further Amco Battery's decision does not lay down the law that in cases where the assessee is entitled to get the benefit of the Modvat scheme there can be no question of suppression of fact. Once the issue of suppression is separately dealt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contention of the department is that the price charged to other customers was normal price and therefore the same price was applicable to the goods cleared to their Nasik unit as per the provision of Section 4(1)(a) of the Central Excise Act. It was also the contention of the department that in cases where there was no sale of the same or identical goods to independent buyers the price of the goods cleared to Nasik unit is determinable under Rule 6(b)(ii) of the Central Excise Valuation Rules, 1975. The period of dispute is October, 1996 to June, 2000. Annexure I to the show cause notice gives the details of the goods involved and the calculations showing the amount of differential duty. It is noted that the department adopted the value at which identical goods were cleared to the wholesale buyers for the purpose of determining the value of goods cleared to the appellant's Nasik unit. The annexure also shows that wherever similar/identical goods were not sold to wholesale buyers the department determined the value under Rule 6(b)(ii) of the Central Excise Valuation Rules for the purpose of assessment. For such determination the department relied upon the cost statement furnished b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ression on their part. Mere non-filing of a declaration under Rule 173(c) cannot be a ground to allege suppression. The show cause notice is time barred. (h) In the price declaration dated 27-7-1997 the appellant stated in column III(c) that the appellant has no wholesale buyer who is related to him. (i) The Commissioner ignored the marketing pattern, which was furnished along with the written submissions during the course of personal hearing. (j) The goods i.e. VI Tubes are basically inputs in the manufacture of vacuum circuit breaker. The Nasik unit is entitled to take Modvat credit on the duty paid on VI tubes. Thus the whole exercise is revenue neutral and therefore no suppression with an intent to evade duty can be alleged. The Commissioner has not taken this aspect into consideration. 4.During the course of hearing, the learned Senior Advocate Shri J.F. Pochkhanawalla reiterated the submissions made in the appeal and argued that the commissioner erred in adopting the highest value of the goods sold to the independent buyers for the purpose of arriving at the value of the goods sold to the appellant's Nasik factory. He also relied on the decision in the case of Kitply Industri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue of the goods sold to the appellant's Nasik unit. The chart also indicates that the department adopted highest comparable price available for the purpose of determining the value. We observe from the documents enclosed to the appeal that apart from the Nasik unit of the appellant there are at least 14 other buyers to whom similar goods have been supplied by the appellants. The department enumerated instances where identical goods were sold to other buyers at prices much higher than the ones shown in invoices pertaining to Nasik units. When the goods are identical the price has to be also identical. The appellants contention that the Nasik unit is a different class of buyer and therefore the price at which the goods are sold to that unit stand on a different footing has to be straight away rejected in view of what has been provided in Section 4(1)(a) of the Central Excise Act. The Section provides for different classes of buyers and therefore different prices subject to the overall condition that such classes of buyers are not related to the assessee. There is no gain saying the fact that the appellant is related person to their Nasik unit though these two units act as different p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to find fault with this. We do not find any reason as to why that the maximum price should not be adopted when once it is known that the goods involved therein are identical to the goods sold to the Nasik unit. 10.We now address ourselves to the issue of time bar raised by the appellant. It is an admitted fact that the appellants did not file any price declaration under Rule 173C. Even in the declaration filed in 1997, the appellant did not furnish correct information in regard to their relationship with the Nasik unit. Without filing the price declaration under the Rule 173C if an assessee chooses to adopt different prices for identical goods when such goods are sold to a related person, it has to be construed that there is a misdeclaration and suppression on the part of the appellant. The appellants refer to CERA objection in the appeal memorandum. It is not clear as to what the appellants want to put forward by this plea. We are required to decide whether there is a suppression allowing the department to invoke larger period of limitation in this case. We find that the records do indicate that the appellant failed to inform the department that he was selling identical goods to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant that suppression cannot be alleged in a case where modvatable goods are involved and are consumed by a sister unit in the manufacture of final product. 12.Insofar as the penalty on senior finance executive is concerned, the Commissioner dealt with this issue in Para 13 of the order. The commissioner seems to have imposed a penalty on him on the ground that he has admitted in his statement that he was a responsible person for the entire excise activity. The Commissioner brushed aside the defence of the appellant stating that it was an afterthought. No evidence has been brought out against him leading to the charge levelled against him. We therefore see no reason for imposing any penalty on him under Rule 209A of the Central Excise Rules. 13.In regard to penalty imposed on the company under Section 11AC, we observe that the Commissioner imposed Rs. 94,48,210/- being the maximum penalty under Section 11AC of the Central Excise Act. In the matter of valuation, unlike in the case of clandestine removal, maximum penalty is not called for. We find that the ends of justice are met if a nominal penalty is imposed on the company in this case. 14.In view of what has been discussed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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