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TMI Blog2004 (12) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the facts that they are acceptable and the issue pertaining to the sale of Aqua Guard etc. to the EFL is covered by the judgment. In so far as the spares are concerned, we find from the submissions of the appellant that large quantity of spares are consumed by the EFL and partly it is sold. Therefore, the department has to re-work the duty particulars with regard to the spares in terms of the Valuation Rules. The matter pertaining to quantification of duty on spares and penalty thereon is remanded to the original authority for de novo consideration. Both these appeals are disposed of partly by allowing the claim of the appellants with regard to the Water Filter-cum-Purifier and by remanding the issue pertaining to the spares. Ordered accordingly. - HON'BLE S.L. PEERAN (J) AND T.K. JAYARAMAN (T), MEMBERS For the Appellant : G. Shiva Dass, Adv. For the Respondent : A. Jayachandran, JDR Order S.L. Peeran, Member (J) 1. In both these appeals, a common question of law and facts are involved and hence they are taken up together for disposal as per law. The appellants' unit is a subsidiary of M/s. Eureka Forbes Ltd. (EFL) and are engaged in the manufacture of Water Filter-cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... support the pleas raised by the assessee on the matter of valuation. Pepsico India Holdings (P) Ltd. v. CCE - 2004 (163) E.L.T. 478 and that of Ultra Refrigeration Pvt. Ltd. reported in 2004 (170) E.L.T. 341 (T) = 2004 (94) ECC 337. It is his further submission that the Commissioner, having relied on the Board's Circular dated 1-7-2002, is clearly erroneous and in this regard relied on the judgment rendered in the case of Maruti Udyog Ltd. v. CCE - 2004 (170) E.L.T. 245 (T) = 2004 (96) ECC 552 wherein it has been held that when the Circular is against the provisions of the Rule, the same cannot be relied upon against the assessee. It is his further contention that as the invocation of Rules 9 and 10 of the Central Excise Valuation Rules has already been set aside in their own case, therefore, any proceedings beyond the terms of Show Cause Notice would not be sustainable and in this regard relied on the following four judgments : 1. Reckitt and Coleman (I) Ltd. v. CCE - 1996 (88) E.L.T. 641(S.C.) 2. Hindustan Polymers Company Ltd. v. CCE - 1999 (106) E.L.T. 12 (S.C.) 3. M/s. Warner Hindustan Ltd v. CCE, Hyderabad - 1999 (113) E.L.T. 24 (S.C.) 4. CCE, Bangalore v. Gammon Far Che ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3-in-1, Water Purifier PG 600 and Water Cooler-cum-Purifier to wholesale, independent dealers who sell the goods on ward in retail or otherwise. The other brand goods namely Aqua Guard Classic, Aqua Guard Royale and Aqua Guard Nova are sold by M/s. EFL directly to the customer as per their network marketing on door to door basis at a retail price. Therefore, from the above sale pattern, the sale of the goods by the assessee can be summed up in the following manner : (i) No sale at the factory gate but all the goods are stock transferred to their depots. (ii) From depots, the sale was made of all the goods to M/s. EFL as well as to the independent distributors. (iii) M/s. EFL in their onward journey sell the goods namely Water Purifier PG 600, Water Cooler-cum-Purifier and Forbes 3-in-1 to independent distributors. (iv) In respect of other three goods namely Aqua Guard Classic, Aqua Guard Royale and Aqua Guard Nova, M/s. EFL, did not sell the goods in wholesale but on retail basis directly to the consumer. (b) From the above admitted undisputed issues and sale pattern of the assessee, the case, before us; is one of valuation of the goods sold to the related persons with regard to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e provisions of Rule 11 which reads as follows : Rule - If the value of any excisable goods cannot be determined under the foregoing 11 rules, the value shall be determined using reasonable means consistent with the principles and general provisions of these rules and sub-section (1) of Section 4 of the Act This rule has to be read with principles enunciated in Rules 1 to 10. The Commissioner has found that Rule 9 would not be applicable in the facts of this case. Principles of Rule 4 read with Rule 7 could be applied since the values as mentioned in Rule 4 i.e. value of goods sold by the assessee for delivery at any time which applies to valuation of goods sold to an independent buyer is available in this case and since goods are not sold at the factory gate in this case but are transferred to a depot, he has also taken the principles of Rule 7 of the new rules under consideration. (e) From a perusal of the grounds submitted by the learned advocate for the appellants, it is apparent that there is no basic grievance in determining the assessable value as arrived at. They are only contesting, in the submissions made before us that the 'commercial levels of both class of buyers h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the plea of non-cibsuderatuib if 'same level' in grounds B. 1 and B.2. (f) As regards submissions on penalty it is found that the Commissioner in Para 43 of the Order has come to a conclusion that : this is not a case of clandestine removal, wilful evasion of the duty, fraud, or collusion with intent to evade the duty..... and since the transactions were within the knowledge of the department, the mandatory interest under Section 11AB has not been demanded on the ground that there is no fraud, collusion or wilful misstatement or suppression of fact or contravention of any of the provisions of the Act or the Rules made thereunder. In view of this, we cannot uphold the assessee liable for a penalty on the ground that negligence though not mala fide, on the part of the assessee has been established which led to contravention of the provisions of the Central Excise Act and the Rules made thereunder and further substantial amount of Central Excise duty was avoided on account of the mis-interpretation by the assessee. Therefore, I conclude that the assessee is liable to a penalty under erstwhile Rule 173Q of Central Excise Rules, 1944 as arrived by the Commissioner to cause a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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