2004 (8) TMI 578

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....he appeals were heard together and are disposed of under this common order. 2. There is a duty demand of over Rs. 1.5 crores and an equal amount of penalty against the first appellant. Upon the second appellant, there is a penalty of Rs. 1 Lakh under Rule 26 of Central Excise Rules, 2002. The duty demand is for the period 1-4-98 to 31-12-2001 and has been raised under the extended period [Proviso to Section 11A of the Central Excise Act] which is applicable to cases involving suppression of facts. The issue raised is the valuation of yarn manufactured and captively consumed by the appellant manufacturer. The valuation was being made in terms of Rule 6(b)(ii) of Central Excise Valuation Rules. This Rule provides for the valuation of ....

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....city since that represented the market cost (sale price of the Electricity Board). More so, since the yarn manufacturing division is billed at this rate by the power generation division. The learned SDR has also relied on the decisions of the Apex Court in the cases of Ashok Leyland Ltd. v. Collector of Central Excise, Madras [2002 (146) E.L.T. 503 (S.C.)] & Tata Iron & Steel Co. Ltd. v. Collector of Central Excise, Jamshedpur [2002 (146) E.L.T. 3 (S.C.)] in support of this contention. 6. The issue raised is the interpretation and implementation of Rule 6(b)(ii) of the Central Excise Valuation Rules. After considering this Provision in detail, the Apex Court held as under in the case of Union Carbide India Ltd. (supra) :- "4.&ems....