TaxTMI 
TaxTMI 
2011 (2) TMI 599
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....lleging that they have suppressed the facts of producing of scrap from the assessable value and has mis-declared the price of the finished goods manufactured by them and returned to M/s.Mahindra & Mahindra Ltd. The said show-cause notice was adjudicated by the Commissioner, who confirmed the duty demand of approximately Rs.1.90 crores and also imposed penalty of Rs.1.82 crores apart from penalizing the employees of the appellant company. The Commissioner also ordered for recovery of interest on the duty confirmed under Section 11AB of the Central Excise Act, 1944. The appeal filed against the said order was allowed by this Tribunal vide order No.C-I/2005 to 2008/WZB/2003 dated 02/09/2003. 2.2 Aggrieved by the said order, the Revenue filed civil appeal before the Hon'ble Supreme Court and the Hon'ble apex Court vide order dated 26/06/2006 remanded the matter back to the Tribunal to rehear the matter on the basis of the report of the cost auditor, who had been appointed by the Court to submit their report thereon. The Tribunal vide its order No.A/62-63/07 dated 23/01/2007 upheld the demand reduced, penalty imposed on the appellant company and allowed ....
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....ination. 2.4 The submissions made by the appellants before the CESTAT were that the calculation of actual cost in the Cost Auditor's report for each component showed that even if the value of scrap is included there was no short payment of duty by them. The calculation in the cost audit report dated 25/11/2006 also showed that there is excess payment of duty as evidenced from the details given below:- A) Assessable value = Landed cost + value of scrap actually realized + conversion charges Year Duty short paid (as per charts annexed by Cost Auditor) Excess duty paid (as per charts annexed by Cost Auditor Net short paid/(excess paid) (excess payment is shown in brackets) 1996-97 20,16,394 37,83,862 (17,67,468) 1997-98 8,11,504 60,89,109 (52,77,605) 1998-99 8,64,956 7,57,625 1,07,331 1999-2000 18,96730 92,39,595 (73,42,865) Total 55,89,584 1,98,70,191 (1,42,80,607) B) Assessable value = Landed cost + value of scrap at agreed fixed rate of Rs.7.50 per kg. + conversion charges charged. Year Duty short paid (as per charts annexed) Excess duty paid (as per charts annexed) Ne....
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....ded cost of raw material. Accordingly, he submitted calculations by including the realizable value of scrap in the landed cost of raw material.The inclusion of the scrap realizable value was not in conformity with the generally accepted principles of costing but was in conformity with the Hon. Supreme Court's order dated 10/06/2005 in the case of General Engineering Works, Bharatpur Vs. CCE, Jaipur (CA No.3852-3855/1999). 2.6 Based on the comments given by the Cost Auditor the Commissioner adopted the values given by the Cost Auditor, the Commissioner came to the following conclusion and arrived at short payment as well as excess payment as indicated below:- "After taking the landed cost of raw material and adding the value of scrap actually realized by the assessee as well as the packing charges, tool amortization and other charges received by MUSCO, which have been included in the Cost Auditor's report and not disputed by the assessee, the total short payment as well as excess payment is as under:- Year Duty excess paid Duty short paid 1996-97 37,35,869.61 2108625.96 1997-98 45,34,842.79 2718927.40 1998-99 (upto Feb 99) ....
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....ees have claimed that they were led by the decision of the Asstt. Collector for the prior period. However, the factual position is entirely different. The decision of the Asst. Collector for the earlier period was with reference to the costing principles as the transactions at that time were between two related parties, which is not the case here. There was no job work involved at that time. In fact even the Asstt. Collector had held that in case of sale to independent parties, the sale proceeds of scrap had to be added to the assessable value as a consideration. In the face of such clear cut directions during the relevant period, they continued to artificially depress the assessable value by adjusting the sake price of the waste and scrap in the job work charges. They have all along been declaring to the department that the invoice price was an independent price, which was not in any way affected by any other consideration. The depression of the assessable value by adjusting scrap value in the job work charges is a clear evidence of intentionally under valuing their goods and any declaration to the contrary was a clear mis-declaration.&nbs....
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....(249) ELT 232 (T), which has been affirmed by the Hon'ble apex Court reported in 2010 (260) ELT A84 (SC). He further contend that the demand is beyond the normal period is not maintainable in their own case the Tribunal in 2003 had once accepted the method adopted by the appellants in arriving at the assessable value, which itself shows that when the appellants had adopted the aforesaid method, they had bonafide belief that the said method was correct and, therefore, the charges of suppression or willful mis-statement would not arise. Further, the Tribunal in the appellant's own case have another factory at Nasik, reported in 2009 (234) ELT 668 (T) had held that the demand barred by time on identical set of facts. Further, the method adopted by the appellants had been approved by the jurisdictional Assistant Commissioner as early as in 1986 vide order dated 28/06/96 and the department was aware that the scrap value was deducted from the formula to arrive at the assessable value. In the light of these suggestions they have contended that the demand is not sustainable. 3. The Ld. Dr on the other hand would reiterate the f....
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.... 6. In our view, the said judgement does not coming in the application as in the instant case the Hon'ble apex Court had directed this Tribunal to go by the Cost Auditor's report with regard to the inclusion of the cost of the scrap in the assessable value of the finished goods supplied on job work basis. When such a specific directions exists for consideration for the decision by this Tribunal, the Tribunal has to abide by this specific directions rather than relying on the decisions given in other cases where the decision might have given under a given set of facts. Therefore, the reliance placed on this judgement does not help the appellants in any way. 7. As regards the contention of the appellant that the demand is hit by the limitation of time. We find that in appellant's own case in respect of another factory at Nasik involving identical set of facts, this Tribunal at order No.A/514-516/08/C-I/EB had held that the demands invoking the extended period of time is clearly barred by limitation when the appellants had entertained a bonafide belief that the value of the scrap was not an element of inclusion in the assessable value of automobile ....