TaxTMI 
TaxTMI 
2005 (1) TMI 625
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....1944 (hereinafter referred to for the sake of brevity as 'the 1944 Act'). 3. The appellant, M.K. Kotecha, proprietor of M/s. Tapi R.C.C. Pipe Product and M/s Sakri Cement Pipe Product, is a manufacturer of R.C.C. pipes and collars falling under Chapter Heading 6807.00. During the period April, 1990 to June, 1992, he cleared RCC pipes and collars to various Societies under the Lift Irrigation Scheme, by declaring that the RCC pipes and collars were not sold but were captively consumed in the projects undertaken by him under the works contract. Accordingly, he filed the price list together with the annexure thereto giving following particulars: PRICE LIST Sl.No. Excisable Goods Comparable goods if known to Assessee Difference if any in material characteristics of the goods & assessment of comparable goods Value of the Goods in Col.2 classified and approved Value of the Goods in Col.2 as approved by the proper officer Remarks Description Tariff Classification Description Tariff Classification Assessable Value As Unit of sale Pipe Collar Pipe Collar 1 2 3 4 5 6 7 8 9 10 11 RCC Pipe & Collar 6807.00 Size in mm. & class No. 1. 1200 mm NP3 ,, ....
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....Charges Supervision Charges Total Profit about 10% Cost of Pipe Cost of Collar Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. 1 1200 mm NP3 1584 642 159 61 75 59 2580 258 2838 - 2 1000 ,, ,, 1125 466 101 59 75 47 1873 187 2060 - 3 900 ,, ,, 836 424 81 59 75 47 1522 152 1675 - 4 800 ,, ,, 677 340 77 53 66 40 1253 125 1378 - 5 750 ,, ,, 640 330 55 45 60 35 1165 116 1282 - 6 700 ,, ,, 568 310 50 45 60 35 1068 107 1175 - 7 600 ,, ,, 446 235 47 42 50 35 855 86 941 - 8 500 ,, ,, 317 183 44 26 33 21 624 62 686 - 9 450 ,, ,, 285 158 35 20 30 16 644 64 598 - 10 400 ,, ,, 258 147 29 20 29 16 499 50 549 - 11 350 ,, ,, 200 140 21 9 26 10 406 41 447 - 12 300 ,, ,, 182 119 18 8 22 9 358 38 394 - 13 750 ,, P2 575 326 50 35 70 45 1101 110 1211 121 14 700 ,, ,, 556 307 47 30 66 42 1048 105 1153 115 15 600 ,, ,, 432 229 33 23 66 42 825 83 908 91 16 500 ,, ,, 307 162 23 21 38 26 577 58 635 64 17 450 ,, ,, 250 133 18 16 33 20 470 47 ....
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.... part VI(b) proforma supported by a certificate from his Charted Accountant. It was further submitted that alleged comparable prices given by DSR and MSSIDC were not taken into account at the time of giving of tender; that independent costing was done and that the rates tendered covered the entire job work, hence, prices of comparable goods did not exist. It was further submitted that the RCC pipes and collars, manufactured by the appellant, were not sold as the appellant had undertaken a project on turnkey basis and hence, there was no sale, and, therefore, the appellant had filed the price list in part VI(b) proforma on cost basis, particularly, because there was no separate contract for sale of RCC pipes and collars. It was further submitted that the RCC pipes and collars were not sold but were used in the project and, therefore, the valuation of such pipes and collars was done on the cost basis. 6. By order dated 22.5.1995, the Collector came to the conclusion that the appellant was supplying pipes and collars to various Lift Irrigation Schemes; that in the project reports, the valuation data of such pipes and collars was available which was made known to the appellant at the ....
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....suppression of facts resulting in short-levy of duty. 10. In the case of Collector of Central Excise, Hyderabad vs. M/s Chemphar Drugs & Liniments, Hyderabad reported in [(1989) 2 SCC 127], it has been held, that, in order to constitute willful misstatement, some positive act other than inaction, omission or failure on the part of the manufacturer or conscious and deliberate withholding of information when the manufacturer knew otherwise, is required to be established before he is saddled with the liability. Whether in a particular set of facts and circumstances, there was wilful misstatement or suppression is a question of fact. 11. In the case of Pushpam Pharmaceuticals Company vs. Collector of Central Excise, Bombay reported in [1995 Suppl. (3) SCC 462], it has been held, that, in order to constitute suppression under the proviso to section 11A(1), there should be facts showing that correct information was not deliberately disclosed in order to escape from liability to pay duty. Mere omission is not a deliberate act. 12. In the case of Cosmic Dye Chemical vs. Collector of Central Excise, Bombay reported in [1995 (75) ELT 721], it has been held by this Court that the word "wi....
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....it of sale 1 2 3 4 5 6 7 8 9 10 (B) If particulars of comparable goods are not known - Excisable Goods Cost of production or manufacture, supported by detailed calculations, on a separate sheet how the cost has been worked out. Profits that would have been normally earned by the assessee on sale of such goods and the basis thereof. Value Claimed for approval Value approved Remarks Description Tariff Classification Rs. Unit 1 2 3 4 5 6 7 8 16. The above price-list proforma is prepared in terms of rule 6 of Central Excise (Valuation) Rules, 1975. We quote hereinbelow the entire rules 6 and 7 as the same is relevant for deciding this case. "Rule 6. If the value of the excisable goods under assessment cannot be determined under the 4 or rule 5, and - a) where such goods are sold by the assessee in retail, the value shall be based on the retail price of such goods reduced by such amount as is necessary and reasonable in the opinion of the proper officer to arrive at the price at which the assessee would have sold such goods in the course of wholesale trade to a person other than a related person: ....
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.... Rules, it is clear that the said rule applies to excisable goods, not sold by the assessee but used or consumed by him in the production or manufacture of some other articles. Rule 6(b) refers to valuation of goods which are captively consumed by the assessee. It is in two parts. Under rule 6(b)(i), the assessable value of goods captively consumed is determined on the price at which similar goods are sold by the assessee and by other manufacturers, subject to adjustment. On the other hand, under rule 6(b)(ii), the assessable value is determined on the basis of aggregate cost of raw materials, manufacturing cost and profit margin, if any. In short, under rule 6(b)(i) of the Valuation Rules, 1975, the value of goods captively consumed was the value of comparable goods produced by the assessee or any other manufacturer. In the absence of such a valuation, the assessable value had to be done under rule 6(b)(ii) on the basis of cost of production, including the profits which the assessee would normally earn on the sale of such goods [See: Gwalior Rayon Manufacturing (Weaving) Company vs. Union of India & Others reported in [1982 ELT 844 (MP)]. 18. On enquiry, learned counsel appearin....
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....efore the Collector that he had undertaken a composite contract (project) and, therefore, the prices of comparable goods were not available. However, as found by the Collector on evidence, the RCC pipes and collars were manufactured by the three units of the appellants. The contract price agreed upon was based on complete break-up of the charges including the prices of the RCC pipes and collars. The said pipes were manufactured in the factory of the appellant. They were cleared therefrom. The pricing of RCC pipes and collars was indicated in the project reports. They were based on the pricing guidelines fixed by Maharashtra State Sewerage and Water Board. The said Board had made rate analysis to arrive at the value of the RCC pipes and collars. Therefore, the appellant knew of the comparability of his goods with those of other manufacturers. Hence, the Collector was right in coming to the conclusion that the appellant had wilfully misstated and suppressed the facts in order to mislead the department. Consequently, the department was right in invoking the larger period for demand of duty under the proviso to section 11A(1). 21. Lastly, on facts, we find that rules 1 to 6 of the V....
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.... obliterated in view of the Amendment Act No.10 of 2000 by which the expression "short-levy" has been redefined to include levy resulting from mistaken approval granted to the classification list. The validity of this amendment has been upheld in recent judgment of this Court in the case of ITW Signode India Ltd. vs. Collector of Central Excise reported in [(2004) 3 SCC 48], to which one of us [Dr. AR. Lakshmanan, J.] was a party. Secondly, the decision in Cotspun Limitedís (supra) was confined to interpretation of the word "short-levy" in section 11A(1). That judgment was not concerned with the proviso to section 11A(1). In fact, vide para 67 of the judgment of this Court in ITW Signode India Ltd. (supra), it has been observed that the extended period of limitation under the proviso can be invoked in cases of positive acts of fraud, collusion, wilful misstatement or suppression of fact on the part of the assessee and that such a positive act must be in contradistinction to mere inaction. The present case is not a case of simple omission. It is a case of wilful misstatement leading to under-estimation of value of goods cleared by the appellant. In the circumstances, we do no....