2006 (5) TMI 337

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....ngalore on stock transfer basis. The appellant is a 100% E.O.U. The under valuation alleged by the Revenue appears to be on account of the methodology adopted by the appellants and that adopted by the Revenue. The appellant's unit at Bangalore has also been manufacturing and clearing similar products to their other unit at Noida and Baroda. In respect of such transfers, price declarations were filed indicating assessable value by adopting the cost construction methods as the goods were transferred to their own unit and were not sold. The Commissioner of Central Excise, Bangalore-I Commissionerate appointed one independent Cost Auditor to conduct a cost audit of the unit under Section 14A of the Central Excise Act, 1944. He submitted a repor....

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....mand made on account of the allegation that the stock transfer of the goods effected by the appellants cannot be considered as sale. He has also held that the longer period of limitation cannot be invoked since there was no suppression of any information by the appellants and there is no intention to evade payment of duty since sister unit of the appellants in Bangalore in any case would be eligible to take Modvat credit of whatever duty was paid by the E.O.U. of the appellants and has also held that no penalty is impossible. But the Commissioner has confirmed the demand of Rs. 2,66,627/- on account of the alleged under-valuation of the goods cleared during the period from 5-1-2002 to 29-3-2002. The appellants strongly challenged the order ....

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....eliance on the Circular dated 30-10-1996 issued by the Board but that Circular has been modified by the Circular No. 692/8/2003-CX, dated 13-2-2003 wherein it has been clarified that the CAS (Cost Accounting Standards) - 2, 3 & 4 are to be adopted for the capacity determination overheads calculation and calculation of cost of production. In view of the above, the learned Advocate requested the Bench to allow the appellant's appeal. 5. The learned JDR re-iterated the order of the lower authority. 6. We have gone through the records of the case carefully. The whole dispute revolves around the addition of suitable margin of profit and the addition of selling and distribution expenses in the value of the goods stock transferred ....