2008 (9) TMI 799

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....able under sub-heading No. 2204.10 of the First Schedule to the Central Excise Tariff Act, 1985. It was noticed that the Appellants manufactured Ethyl Alcohol, which was used in captive consumption by their other unit viz. M/s. Somaiya Organics (I) Ltd., Barabanki. It was also noticed that the Appellants paid the duty on captive consumption at a lower price compared to the same goods manufactured by the other units. The Appellant paid the differential duty of Rs. 8,64,701/- vide Entry Nos. 2256 and 2257, both dated 27-7-2001 for the period 15th April, 2000 to 31st March, 2001. A show cause notice dated 18-7-2005 was issued proposing the demand of interest of Rs. 4,57,984/- for contravention of Rules 6(B)(1) of the Central Excise Valuation R....

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....e Supreme Court as reported in 2008 (224) E.L.T. A34 (S.C.). 5. After hearing both the sides and on perusal of the records, it is revealed from the show cause notice that the Appellant removed Ethyl Alcohol captivity consumed by the other unit, M/s. Somaiya Organics (I) Ltd., Barabanki. As per new Valuation Rules, effective from 1-7-2000, they are liable to pay the duty on the valuation at 115% of the cost of production. It is seen that during the period 15th April, 2000 to 31st March, 2001, they paid the duty on captive consumption under the new Valuation Rules. On scrutiny of the cost of the final products, it was found that they did not add the cost of denaturants and the assessable value was ascertained to Rs. 14.72 per litre in....