TaxTMI 
TaxTMI 
2005 (1) TMI 625
X X X X Extracts X X X X
X X X X Extracts X X X X
....o section 11A(1) of the Central Excise Act, 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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....; 28 278 28 The last 'questionnaire' is applicable to this Pricelist. I/We declare that particulars herein furnished are complete & true to the best of my / our knowledge & belief. Sd/- Signature of Assessee ANNEXURE PRICE (COSTING DETAIL) OF R.C.C. PIPES & COLLARS: EFFECTIVE FROM 6.5.1989 : PIPE LENGTH : 2.5 MTRS. Sl. No. Size of Pipe Class Steel Cement Sand & Metal Electricity Greased Etc. Labour 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 ,, ,, 5....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rices of RCC pipes & collars, consequently, it was alleged that the appellant had undervalued the prices of RCC pipes & collars by mis-declaring to the department that comparable prices were not available. Accordingly, the department called upon the appellant to show cause why differential duty of Rs.18,34,464/- should not be recovered under section 11A(1) and why for the period 1st April, 1990 to June, 1992, penalty under rule 173-C should not be imposed. 5. By reply dated 27.1.1995 to the show-cause notice, the appellant submitted that the RCC pipes and collars were not marketed but used in the Lift Irrigation Scheme; the appellant denied that the contract awarded indicated the break-up of the charges, including the prices of RCC pipes and collars; that in any event, these prices were lower than the prices of comparable goods and that the comparable prices were not available. It was submitted that contract awarded to the appellant indicated the price for the project comprising of cost of material and cost for joining of RCC pipes/collars besides job of excavation and, therefore, the appellant had invoked part VI(b) proforma supported by a certificate from his Charted Accountan....
X X X X Extracts X X X X
X X X X Extracts X X X X
....llector observed that the RCC pipes and collars were standardized products and that what was true of the pricing by the Board was also applicable to the rate contract price given by the Director of Industries. In the circumstances, it was held, that comparative prices were known to the appellant. Accordingly, the demand was made on above grounds for Rs.18,34,464/- with penalty of Rs.2 lacs. 7. Aggrieved by the Order of the Collector, the assessee preferred appeal to the Tribunal which has been dismissed. Hence, this civil appeal. 8. Two questions arise for determination in this appeal, namely, whether the department was right in invoking rule 7 of Central Excise (Valuation) Rules, 1975 and whether on facts the Collector was right in holding that the appellant had wilfully misdeclared to the department that prices of comparable goods were not available and that the goods cleared were not for sale but for captive purpose. 9. In the present case, the department has invoked the proviso to section 11A(1) of the 1944 Act seeking to recover duty by invoking the extended period on account of wilful misstatement and suppression of facts resulting in short-levy of duty. 10. In th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... clears such goods, shall declare the value under section 4 of the Act in the sale invoice, invoice-cum-challan or like documents used by him for sale or removal of goods. Under clause (iv) of the second proviso to rule 173-C, where as assessee removes such goods, in any manner, which does not involve sale, shall file, with the proper officer, a declaration in the prescribed form. 15. The proforma for determination of value under section 4 read as under: Part VI. -- For excisable goods not for sale but for use or consumption by the assessee / related person for production or manufacture of other articles (cf. Rule 6 of the Central Excise (Valuation) Rules, 1975). (a) If particulars of comparable goods are known - Excisable Goods Comparable goods, if known to Assessee Difference if any in material characteristics of the goods under assessment & comparable goods Value of the Goods in Col.1 claimed for approval Value of the Goods in Col.1 claimed for approval Remarks Description Tariff Classification Description Tariff Classification Assessable Value Rs. Unit of sale ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... except to or through a related person and the value cannot be determined under clause (iii) of the proviso to clause (a) of sub-section (1) of section 4 of the Act, the value of the goods so sold shall be determined' (i) in a case where the assessee sells the goods to a related person who sells such goods in retail, in the manner specified in clause (a) of this rule; (ii) in a case where a related person does not sell the goods but uses or consumers such goods in the production or manufacture of other articles, in the manner specified in clause (b) of this rule; (iii) in a case where a related person sells the goods in the course of wholesale trade to buyers, other than dealers and related persons, and the class to which such buyers belong is known at the time of removal, on the basis of the price at which the goods are ordinarily sold by the related person to such class of buyers. Rule 7. If the value of excisable goods cannot be determined under the foregoing rules, the proper officer shall determine the value of such goods according to the best of his judgment, and for this purpose he may have regard, among other things, to any one or more of the methods provide....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ee is aware of comparable prices. In that respect, he is required to give assessable value of the comparable goods under part IV(a). Similarly, under part VI(a), the assessee is required to give particulars of the difference, if any, in the material characteristics of the goods under assessment and comparable goods. On the other hand, in cases falling under part VI(b), the assessee is required to furnish particulars of cost of production or manufacture on a separate sheet, annexed to the price list. The 3rd and the 4th column of part VI(b) refers to computation of assessable value of goods based on the aggregate cost, together with the profits that would normally accrue to the assessee. [See: Column (5) of Part VI(b)]. 19. In this case, the appellant worked out the prices on total cost and used it as the basis of valuation in support of part VI(a) price list proforma. This hybrid system was adopted by the appellant, though not permissible, to mislead the department. In the circumstances, we are satisfied that the appellant had wilfully misdeclared the pricess at the lower rate and consequently, the department was right in invoking the extended period of limitation under the pro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....upon several authorities. 24. In the case of Universal Cables Ltd. Satna vs. Union of India & Others reported in [1977 (1) ELT page J.92]. on which reliance was placed on behalf of the appellant, it was held that omission to enter correct price in the price list was not a contravention of rule 173-C within the meaning of rule 173Q. However, on facts, the High Court found that the assessee had filed a list in the proper form and in the manner prescribed under rule 173-C showing the price of the goods and, therefore, there was no contravention of that rule. In the present case, as stated above, there is a contravention of rule 6(b) of the Valuation Rules, 1975 read with part VI(a) of the price list proforma. Hence, the judgment in the case of Universal Cables Ltd. (supra) is not applicable to the present case. 25. In the case of Collector of Central Excise, Baroda vs. Cotspun Limited reported in [1999 (113) ELT 353], this Court held that the word "short-levy" in section 11A(1) will not apply to cases where excise duty was levied on the basis of approved classification list. Learned counsel for the appellant heavily relied upon on this authority. In our view, the said judgment....