1997 (6) TMI 147

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....rice lists and making clearances on payment of duty on the approved prices. Ammonia compressors are parts of refrigeration and air-conditioning equipment. Appellant was also availing benefit of the SSI Notification 80/80. The dispute in this case relates to the period 1981-82 to 1984-85. By Notification 80/62 the aforesaid accessories were fully exempt from payment of duty but the notification did not apply to compressors. In other words, appellant had to pay duty on compressors and was not required to pay duty on the accessories. 3. Central Excise Preventive staff found on verification that appellant was undervaluing compressors in order to pay less duty by shifting a part of the value of compressors to accessories which were exempt ....

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....es actually charged by the appellant and the prices charged by appellant for fittings and accessories was very much higher than the prices charged by the competitors. The department had worked out the correct value of fittings and accessories allegedly on the basis of prices charged by competitors enquired for different sizes of ammonia compressors. The show cause notice also alleged that going by the appellant's prices for the parts, the total value of all the components of ammonia compressor was much higher than the prices declared by the appellant for ammonia compressor. These are the main reasons which prompted the department to issue show cause notice alleging allegation and the shifting of value of compressors and evasion of duty. 5.....

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.... period in question before the Joint Director. It appears that representatives of the Federation of Engineering Industry of India met the adjudicating authority and stated that as a small scale manufacturer faced difficulties in the maintenance of detailed records over the past many years. It was apparently agreed by the adjudicating authority and those representatives that the study by the Adviser (Cost) under the Joint Director could be made on the basis of current records and records of the past one or two years which were available with the appellant. Apparently the costing data so prepared by Advisor (Cost) showed that the prices of compressors declared by the appellant were much below the cost price as estimated. 6. In the impug....

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....e notice. Show cause notice was based on the allegation of additional consideration as contemplated under Rule 5 of the Central Excise (Valuation) Rules but final order has been passed on the basis of Rule 7 read with Rule 6(b)(ii) of the Valuation Rules. The question is if there is a valid reason regarding the value of Rule 5 declared by the appellant. Show cause notice urged two reasons for rejecting Section 4(1)(a) value. One was based on the allegation of arriving at the value of ammonia compressor by deducting the competitors' price for fittings and accessories from the price charged by the appellant for ammonia compressors, fittings and accessories and treating the difference as representing the correct value of ammonia compressors. T....