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TMI Blog2005 (5) TMI 212X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacture of copper rods, which were then cleared on payment of duty to independent buyers. 3. The demand confirmed against Chinchpada unit (Appellant No. 1) is on the following two counts : (i) A demand for duty of Rs. 11,77,06,071/- has been confirmed on the ground that the unit, with an intention to evade payment of duty, undervalued the clearances of copper cathodes to the Piparia unit. It has been held by the adjudicating authority that the assessable value of such copper cathodes was required to be determined in terms of Rule 6(b)(ii) of Central Excise Valuation Rules, 1975 on the basis of its cost of production and not under Rule 6(b)(i) of the Central Excise Valuation Rules i.e. on the basis of price of comparable goods, as had been done by the appellant. (ii) A demand for duty of Rs. 5,53,41,272/- has been confirmed on the ground that the appellant had wrongly availed the procedure of Rule 57F(4) for clearing, without payment of duty, spent anode, waste and scrap which was sent for processing to its Tuticorin unit. Likewise, another demand of Rs. 92,50,248/- has been confirmed in respect of clearances of Copper Sulphate and waste and scrap, which was s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by Hindustan Copper Ltd., which is a Government of India undertaking and one of the largest manufacturers of copper cathodes. A chart comparing the values at which goods were cleared by the Chinchpada Unit to the Piparia Unit vis-a-vis the value shown in the price circulars of Hindustan Copper Ltd. was also submitted to the adjudicating authority, copy of which is annexed at Page 118 of the paper book filed. 7. For ease of reference, the said chart is set out hereinbelow. Table showing comparison of the price of copper Cathode manufactured by Hindustan Copper and Sterlite Industries Ltd. Sr. Nos. Period Price as per Hindustan Copper price list (Rs. pmt) Assessable value adopted by Sterlite Industries India Ltd. (Rs. pmt) 01 October, 1996 99,000/- 99,000/- 02 November, 1996 99,000/- 99,000/- 03 March, 1997 1,14,000/- 1,14,000/- 04 June, 1997 1,19,000/- 1,19,000/- 05 September, 1997 1,13,000/- 1,10,000/- 06 October, 1997 1,13,000/- 1,10,000/- 07 December, 1997 1,02,000/- 1,02,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the decision of the Hon'ble M.P. High Court in the case of Gwalior Rayon Mfg. (Wvg. Co.) v. Union of India - 1982 (10) E.L.T. 844, and has understood the said judgment as laying down a proposition that comparable goods under Rule 6(b)(i) means "identical goods". The Commissioner has completely mis-read the judgment of the M.P. High Court. The said judgment, while dealing with a challenge to the constitutionality of Rule 6, observed that if prices of identical goods were available, the same would be most appropriate basis for determining assessable value. It also held that even if the prices of identical goods were not available, the Rule enabled the proper officer to make suitable adjustments in the prices of other goods so as to arrive at the correct assessable value. The said judgment of the High Court therefore does not lay down that 'comparable goods' refer only to identical goods. 10. The appellants have also rightly placed reliance on the decision of the Tribunal in the Case of CCE v. Raymond Ltd. - 2001 (128) E.L.T. 94 (Tri.-Del.), wherein the Tribunal held as follows : "The Rule contains specific direction that where goods under assessment and comparable goods diff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts had correctly compared the prices of their copper cathodes with the corresponding variety (full) of copper cathode manufactured by HCL. Even though appellant had specifically requested the Commissioner to cause verification of the price circulars submitted along with the replies and the written submissions, the impugned order does not contain any finding to show that there exists any material difference between the copper cathodes manufactured by the appellant and those manufactured by Hindustan Copper Ltd. 14. Without prejudice to the above finding as to the non-applicability of Rule 6(b)(ii), it is to be noted that the cost of production as determined by the Commissioner is also incorrect. The various elements of costs added to the assessable value are contrary to the Board's instructions contained in Circular No. 258/92/96-CX., dated 30-10-1996. Also the addition of profit on a notional basis in respect of the Tuticorin plant as well as the Chinchpada Unit for the purpose of determining the cost of anodes and cathodes is completely illogical. The profit which had been added for the purpose of determining the value of anode as well as that of cathode was the corporate profit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee to another unit of the same assessee, which is entitled to take Modvat credit of such duty. The ratio of the above decision still holds good despite the Supreme Court's judgment in the case of Commissioner of Central Excise v. Mahindra Mahindra Ltd. - 2005 (179) E.L.T. 21, as the Supreme Court in that case was not dealing with the case of inter-unit clearance of the same assessee. The Supreme Court, in Mahindra Mahindra Ltd.'s case, was dealing with a situation where goods had been cleared from the factory of a manufacturer to a customer who was availing Modvat credit. It is in this context that the Supreme Court made its observations in the case of Mahindra Mahindra Ltd. Therefore, the ratio of the decision of the Larger Bench, in the case of Jay Yushin is not disturbed by the judgment of the Supreme Court. At the relevant point of time, there was a huge accumulation of Modvat credit at the Chinchpada unit even though the Piparia unit was discharging duty by paying duty in cash. Data to this effect was filed as Annexure 'C' 'D' to appellants' reply dated March 26, 2002. The said data shows that during the period September, 1996 to March, 1998, the unit at Chinchpada ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as one between the principal and a job worker and the assessable value thereof was determinable in terms of Rule 6(b)(ii) as held by the Tribunal in the case of Kandivali Metal Works v. Collector of Central Excise, Mumbai - 1997 (90) E.L.T. 187 (Tribunal) which has been subsequently affirmed by the Supreme Court, has been ably met by the assessee who submitted that - (a) Copies of all price circulars of Hindustan Copper Limited had been annexed with the reply and that the comparison chart annexed at Page 118 of paper book, compared the price at which the appellant transferred the material to its Piparia Unit vis-`a-vis Hindustan Copper Limited prices, for all the months during which clearances had been effected, which fact was evident from Annexure D-2 to the notice which was annexed at Page 48 to the paper book. No price circulars were required for comparison during the months when no clearances had been made by the appellant; (b) The fact that Hindustan Copper Limited was the largest manufacturer of copper in India and had high reputation only furthered the appellant's case, as it showed that it had declared its value on the basis of the most superior product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s after partial/fully re-processing and which are not technologically and commercially feasible to be converted to a final product or are not desirous to be converted further. The appellants had correctly availed the benefit of the job work procedure provided under Rule 57F(4). 19. We also hold that the demand for duty on this count is time barred inasmuch as the appellants had clearly disclosed to the department that they were availing the facility of Rule 57F(2) in respect of the items in question including waste and scrap. The monthly RT-12 Returns contained a separate column relating to such clearances and also indicated payment of 10% thereon as was required at the relevant time. The impugned order completely overlooks these facts. We therefore set aside these two demands. 20. Insofar as demand for duty on the Piparia unit is concerned, in view of our finding that Rule 57F(4) procedure had been correctly followed by the Chinchpada unit, there cannot be a demand for duty in respect of the goods sent back after processing under Rule 57F(4), and it is not open to the Excise authorities having jurisdiction over the Piparia Unit to question the correctness of the availability o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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