2001 (10) TMI 834

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....nager, 1 lakh each on J.C. Bhayani, Manager and H.S. Rajput, Asst. Manager. In the common order impugned in these appeals, the Commissioner has concluded that the value of the yarn that the applicant manufactured and captively consumed in the manufacture of fabric should be based upon the cost of manufacture of these goods plus the profit that the assessee would yield not on the basis of comparable goods available in the market. The Commissioner also held that the duty is payable on the dyeing and sizing to which the applicant subjected the yarn that it purchased from the market and utilised for weaving. 2. It is the contention of the Counsel for the applicant that it had produced before the Commissioner numerous invoices of various....

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....ssuing show cause notice to say that duty must be paid on the yarn only at the spindle stage and the assessee cannot include the cost of dyeing in that yarn and claim Modvat credit on the dying material. It is only subsequent to an order of Commissioner (Appeals) it was held that the applicant could include in the value the cost of dyeing. The decision of the Larger Bench in Tribunal in Raymonds Ltd. v. CCE [2001 (129) E.L.T. 327] is relied upon in support. 4. The Departmental Representative reiterates the Commissioner's finding. 5. As we have noted, there are two distinct bases on which duty has been demanded. The Commissioner has not accepted with regard to the first, the valuation of captively consumed yarn the contention....

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....to justify that by application of such principles, the profit that the Commissioner has taken is incorrect. Similarly inclusion of administrative overheads to determine the cost of manufacture appears to us to be rational and consonance to the Rule 6(b)(ii). 7. We now come to the second issue, the determination of the cost of assessable value that the applicant purchased from the market and subjected to the process of bleaching and dyeing. The contention here is on limitation. The department ought to have been aware that the applicant carried out this activity. The basis for this contention appears to be that since the department was aware that the applicant dyed and bleached the yarn that it manufactured before taking it up for use....