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TMI Blog2004 (12) TMI 227X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to as 'KUWSDB' or the 'Board' in short). The issue relates to the valuation of pipes supplied by the appellants to KUWSDB and also the differential duty payable on escalation cost awarded by KUWSDB. The appellants had a contract with KUWSDB not only for the supply of the PSC pipes but also for laying, joining, commissioning, testing and maintenance of pipeline for 12 months. The contract is a composite contract and the contracted amount includes the cost of the PSC pipes and the cost of the other activities. In other words, the cost of the PSC pipes is not bifurcated in the contract amount. However, the appellant discharged duty based on the cost of the PSC pipes certified by their Chartered Accountant. The scrutiny of the Charter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y and the balance of 13% was for transportation, laying, joining, maintenance, etc. Even though the Tribunal ruling indicated 87%, the Commissioner had taken 73% of the composite cost on the basis of the data rate as assessable value and found that the same was much lesser and reasonable. He had also demanded duty on the escalation charges considering the same as additional consideration. A penalty of Rs. 1,00,000/- under Rule 173Q has been imposed. Interest under Section 11AB has been charged. A penalty of Rs. 50,000/- has been imposed on Shri B.S. Ravi Kiran, Managing Director of the appellant's Company under Rule 209A of the Central Excise Rules, 1944. 3. Shri S. Raghu, learned Advocate appeared on behalf of the appellants and Shri L. N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld that the Departmental Circular marked "Confidential" and hence public being unaware of its contents, cannot be held against the citizen if he has not fulfilled the instructions contained therein. In view of the above ruling the valuation based on the Confidential document of the Board is not sustainable. (vi) The Chartered Accountant's Certificate was produced in 1995 itself. The Department has chosen not to initiate any action till 2000. The Hon'ble Apex Court in the case of M/s. Union Carbide India Ltd. reported in 2003 (158) E.L.T. 15 (S.C.) = 2003 (58) RLT 715 (S.C.) has held that the cost as reckoned by a man of commerce is to be adopted. (vii) The demand for differential duty is for the periods from 1-1-1995 to 31-8-1999 and f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regards the escalation charges, the statement recorded on 24-8-1999 is clearly stated that they have received initial escalation of about 14.5% in respect of their Bill dated 28-11-1995 and the amount so received for pipes works out to Rs. 2,93,062/- for the quantity of 7,815 mtrs for which the excise duty is to be paid. (ix) With regard to the second escalation of about 17.39% awarded in February 1997 amounting to Rs. 25.90 lakhs, it was stated that the escalation was yet to be received. Even though, the appellants had been awarded escalation charges amounting to Rs. 106.12 lakhs, they have not accepted the escalation awarded. The duty is become payable only when the amount is received and the same is collected by raising an excise invoi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fence and hence, the penalty under Rule 209A of the Act imposed on him is not justified. 5. Shri L. Narasimha Murthy, learned SDR reiterated the observations raised by the Commissioner in the Order-in-Original and said that in the absence of Section 4(1)(a), the best method adopted by the Commissioner is legal proper. 6. We have considered carefully the submissions made by both the sides and perused the records of the case. The appellant supplied PSC pipes to KUWSDB. In a composite contract, there is no way of knowing the real cost of the PSC pipes. The appellant cleared the goods on the basis of the cost certified by the Chartered Accountant. There is nothing wrong in this. But the Revenue is not bound to accept the Chartered Accountan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are observed and also based on feed back obtained from different manufacturers. It was also stated that the data rates are confidential document of the Board and used for arriving schedule of rates. The Commissioner has found that the rates adopted by M/s. Indian Hume Pipes are comparable to the data rate of the Board. In these circumstances, the Commissioner's method for arriving at the assessable value in respect of the appellant's product is very scientific and not based on assumptions and presumptions as contended by the appellants. He has also taken into account the Tribunal ruling in the case of M/s. Indian Hume Pipe Co. Ltd., reported in 1994 (70) E.L.T. 752 (T). When the appellant has not adopted the correct value in clearing his go ..... X X X X Extracts X X X X X X X X Extracts X X X X
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