TaxTMI 
TaxTMI 
2001 (4) TMI 621
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....aluation of the Bulk Drugs as disclosed to the Central Excise Authorities and to the Drug Control Authorities. Where the later declarations were based on the details of various items of costing, the valuation for the Central Excise was merely described as "Selling Price" fixed by the company. The prima facie view of the officers was that the value of the goods was undeclared to the Excise Department. The officers recorded the statements of certain officers of M/s. GRL. Shri D.K. Arsiwalla, Finance Director of M/s. GRL stated that Bulk Drugs viz., Hydroxy Progesterone caproats, Mesterolone, Bisacodyl, Xantinol, Nicotinate & Elophylline, were "non-scheduled bulk drugs" and were not subject to price control by Drug Control Authorities. He admitted that the price declared to the Excise authorities were less than the actual cost of production plus profit. He described it as corporate policy. Shri M.V. Gazinkar, the Costing and Budgetting Controller of M/s. GRL in his statement accepted that the price declared to the Excise Authorities was lower than the cost of production and also that the cost statements submitted to the Drug Control Authorities were not disclosed to the Excise Authori....
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....upreme Court in the case of J.K. Cotton Spg. & Wvg. Mills Co. Ltd. [1998 (99) E.L.T. 8]. We have examined this judgment. The Court in this judgment were examining the issue whether in view of the facts before them, the extended period could be invoked or not. On careful perusal we do not find any ratio appearing from the said judgment to support the claim made by Shri Setalwad. In para 21 of the said Judgment the various situations in the presence of which the extended period could be invoked are listed. Reference to the judgment was made in the cited judgment of the Tribunal C-II/2789/98-WZD, dated 30-11-1998 of M/s. Enron Oil & Gas India Ltd. v. Commissioner of Central Excise. Although before the Tribunal the same point as is now raised, was raised, there is no definite finding of the Tribunal on this argument. 5. Section 11B of the Central Excise Act, 1944 permits refund to be claimed of any duty paid by the assessee on valid grounds within the period prescribed. If in view of the voluntary payment, the show cause notice did not allege that the duty was initially short-paid, then the Department would be hard put to contest or rebut the claim made by the assessee for refu....
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....ice fixed under any law for the time being in force or at a price, being the maximum, fixed under any such law, then, notwithstanding anything contained in clause (iii) of this proviso, the price or the maximum price, as the case may be, so fixed, shall, in relation to the goods so sold, be deemed to be the normal price thereof; (b) Where the normal price of such goods is not ascertainable for the reason, that such goods are not sold or for any other reason, the nearest ascertainable equivalent thereof determined in such manner as may be prescribed." CENTRAL EXCISE (VALUATION) RULES, 1975 xx    xx    xx    xx     xx    xx Rule 6 xx    xx    xx    xx     xx    xx  (b) Where the excisable goods are not sold by the assessee but are used or consumed by him or on his b....
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....ious standards prescribed in the Pharmacopoeia. Some of the bulk drugs are listed in the First Schedule to the Drugs (Price Control) Order, 1965 and are termed as "scheduled drugs". Those bulk drugs not so listed are called "non-scheduled drugs". The Drugs (Price Control) Order is not issued under Drugs (Control) Act but under the Essential Commodities Act, 1955. The order makes a clear distinctive between "drugs" and "formulations". In terms of para 5 of the order, the prices of the "scheduled drugs" are fixed by the Government. This is on the basis of the cost of production plus appropriate margin of profit. The details as to the cost are to be furnished in terms of para 4 of the order. The Government fixes the maximum price, the retail price and the selling price of the scheduled bulk drugs. The deviation from the prices so fixed attracts penalty. Para 5 of the said order requires costing details of 'non-scheduled drugs' also to be furnished to the Government and the Government has the power to fix the prices of the 'non-scheduled drugs' also. Para 15 of the said order requires that prices of 'non-scheduled formulations' should be printed on the cartons and also in the price lis....
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....ly claimed to be non-scheduled. Before us it was claimed that 'Etofylline' was 'scheduled bulk drug'. Reference is made to letter dated 22-1-1998 of the National Pharmaceuticals Pricing Authority. In this letter the assessee-company has been called upon to submit price data for Etofylline in the format applicable to scheduled bulk drugs on the ground that it was a derivative of 'Theofylline'. Shri Setalwad stated that the relevant proviso of Section 4 of the Central Excise Act would apply for pricing of this substance and that out of the total duty allegedly short-levied, duty of about Rs. 75 lacs demanded against Etofylline cannot be sustained. 18. Prima facie the argument has merit. Shri Jain, however, made the claim that the provisions of Section 4(1)(a) would come into play only where there is a sale. It is his statement that even for the proviso (ii) to apply there has to be a sale in the course of wholesale trade. We have reproduced hereinabove the relevant provisions of the section and we find the claim to be correct. The main section as well as the proviso proceeded on the assumption that there is a sale. Where there is no sale this proviso would not apply and even ....
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....on 11A. In support of this argument ld. Counsel submits that even if the price of the bushes supplied by Punjab Tractors was included in the value of Axle Beam Assembly and duty paid accordingly, the Punjab Tractors could have claimed Modvat credit of that amount. In such a situation there would not have been any intention to evade payment of duty. If duty was paid taking into consideration the value of bushes as well, when Modvat credit is claimed, result would have been Revenue neutral. In such a situation, it was contended that the party could not have been attributed with any intention to evade payment of duty. We find much force in this argument. In a situation where the job worker utilizes the goods supplied by the manufacturer free of cost and includes the value of such goods for the purpose of payment of excise duty, the manufacturer can claim Modvat credit. This will result in Revenue neutral. In such circumstances, we are clear in our mind that job worker cannot be attributed with any intention to evade payment of duty. In the absence of such an intention to evade payment of duty, Department will not be justified in invoking the provision contained in proviso to Section 1....