1997 (9) TMI 302

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.... modvat credit taken in respect of inputs which had been received by them for job work purposes. The Learned lower authority has held that modvat element has to be added for arriving at the assessable value and inasmuch as the appellants had not done so, and the department had not been made aware of the same, there was an element of suppression longer period of limitation has been invoked. 2.  The appellants have been asked to pay the duty amount of Rs. 5,96,454/- and penalty of the like amount has also been imposed under Section 11A of the Central Excise Act. 3.  The learned Chartered Accountant for the appellants at the outset submitted that the learned lower adjudicating authority in spite of being pointed out that the is....

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....erefore the cost which was reckoned in the hands of the job workers was only the cost of the material without the duty element. He has pleaded that this decision has been followed in subsequent decisions of the tribunal in the case of Jay Engineering Works reported in 1997 (93) E.L.T. 492 (Tribunal) = 1997 (19) R.L.T. 788 and also by the East Regional Bench in the case of Konark Television Ltd. reported in 1997 (22) R.L.T. 277. He has pleaded that the East Regional Bench have distinguished the ratio of the decision of Mysore Paper Mills Ltd. case while following the ratio of the Daiichi Karkaria case. 4.  He has pleaded that the East Regional Bench in the case of Konark Television Ltd. has held at para 5 as under :- 5. We have ca....

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.... of clearance of the goods will have to be excluded from the wholesale price of the goods....if the manufacturer has utilised duty paid inputs for manufacturing the goods or has utilised the duty paid wrapping paper before delivery, no deduction before delivery already paid on the inputs can be allowed under Section 4(4)(d)(ii). The duty will have to be levied at the time of removing from the factory." We observe that the controversy in the Mysore Paper Mills case has no relevance in the facts of this case. It is only the duty on the T.V. sets in terms of Section 4(4)(d)(ii) has to be decided. This is what has actually been done by the respondents while submitting the price list. In other words, deduction of duty of Rs. 1675/- has been made....

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.... reason that the modvat element taken is to be added for arriving at the assessable value under Rule 6(b) of the Valuation Rules. It is observed that the Larger Bench of the Tribunal in the case of Daiichi Karkaria has clearly held in para-19 which is reported as under :- 19. It was on this logic that the old Rule 56A was interpreted by the Ministry of Finance by letter dated 25-9-1976 and by the Government in Union Carbide Ltd. case, 1982 E.L.T. 683. It is this logic which is the basis of the explanation offered by the Board in the guides referred to earlier. The speech of the Finance Minister and the other materials referred to earlier clearly indicate the mischief that was sought to be overcome and the object and purpose sought to be ....