2009 (6) TMI 756

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....under dispute, Unit I engaged in spinning (Unit I) sold 100% cotton yarn manufactured by them to one M/s. Bansali Tradelink (P) Ltd., ('Bansali' for short) who in turn had sold the same consignment to the unit of the company located at Narol (Unit II) within Ahmedabad District. The department's contention is that when the clearance was in the nature of clearance for captive consumption since the cotton yarn cleared by the unit I was directly consigned to Unit II and role of the purchaser was only preparation of invoices as a middleman. Accordingly, the department has taken a stand that such clearances have to be treated as clearance for captive consumption and therefore the valuation has to be on the basis of 115% of the cost of production.....

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....with returns filed with the department. (e)     He cited several decisions in support of his contention that since the department was already aware of all the facts in 2002 itself, the show cause notices are clearly time barred. (f)      He also submits that the whole exercise is Revenue neutral since if the appellants were to pay higher duty in Unit I, credit of the same was available in Unit II during the relevant period. Therefore there could not be any intention to evade payment of duty in Unit I when the credit was available for duty paid by Unit I in Unit II. (g)     He also submits that the department has not made out any case to show that there was no sale to ....