2006 (2) TMI 361

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....ng assessable value in terms of cost construction method under Rule 6(b)(ii) of the Central Excise (Valuation) Rules, 1975, during the period 1994-95 to May, 1997, on the ground that there was no wholesale price for these goods. Investigations conducted by officers of the Department found that the Calcutta unit had sold rotary control valves at much higher price than the assessable value adopted by the Hosur unit. It appeared that the Hosur unit was undervaluing the goods with intention to evade payment of duty. Accordingly, a show cause notice was issued on 28-4-1998, invoking the extended period of limitation, for recovery of differential duty from the appellant and for imposing penalty on them. The proposals of the Department were contes....

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....t had suppressed any fact with intent to evade payment of duty. Hence the extended period of limitation was not invocable in this case. The entire demand was barred by limitation. In support of this plea of limitation, learned Consultant relied on the Tribunal's Larger Bench decision in Jay Yuhshin Ltd. v. CCE, New Delhi - 2000 (119) E.L.T. 718 (Tri.-LB) and the Supreme Court's decision in CCE v. Narayan Polyplast - 2005 (179) E.L.T. 20 (S.C.) = 2005 (119) ECR 16 (S.C.). 3. Learned SDR referred to the Supreme Court's judgment in Ashok Leyland v. CCE, Madras - 2002 (146) E.L.T. 503 (S.C.) and submitted that the Apex Court's decision was on a similar set of facts and hence squarely applicable to the facts of the instant case. It was a....

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....tion 4(1)(b). We find that, in the case of Ashok Leyland (supra), their Lordships were dealing with a similar issue. The company had transferred their goods from one unit to sister units and the latter sold the goods to dealers. The sale price to dealers was treated as normal price and the goods transferred were held to be assessable under Section 4(1)(a) and not under Section 4(1)(b). As rightly pointed out by learned SDR, the valuation dispute in the instant case seems to be squarely covered by the Apex Court's judgment in the said case. Accordingly, we upheld the finding recorded by the adjudicating authority on the valuation issue. 5. The next question is whether the larger period of limitation was invocable in this case. The sh....

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....n 11A(1) of the Central Excise Act. It was held by the Apex Court, in the said case, that the availability of Modvat credit to an assessee was only one of the considerations for deciding applicability of the proviso to Section 11A(1). In the instant case, we find that the availability, to the sister unit at Calcutta, of Modvat credit of the duty paid by the assessee is the only ground stated in the appeal against invocation of the proviso to Section 11A(1) of the Act. In the circumstances, it cannot be said for certain that the appellant had no intention to evade payment of duty while declaring lower prices for the subject goods under Rule 173C during the period of dispute. Thus plea of limitation also fails. 6. In the result, the d....