TaxTMI 
TaxTMI 
2011 (4) TMI 718
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....ter 52 of Customs Excise Tariff Act, 1985. Their factory was visited by the officers of Cost Audit of Central Excise Commissionerate on 11.02.98, who raised various objections. It was observed that during the period from December 1994 to September 1996, the appellants had manufactured cotton yarn and consumed the same captively. The assessable value adopted by the respondents for discharging their duty liability in respect of said cotton yarn was not in consonance with the provisions of Rule 6(b)(ii) of Central Excise Valuation Rules, 1975. As such, a view was entertained that the assessable value of the yarn captively consumed by the appellant is required to be arrived at on cost basis and the appellants have under-valued the same with dut....
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....ton yarn other than sewing thread with the process of dyeing cum sizing. He also referred to another Show Cause Notice issued by the Assistant Commissioner, prohibiting the assessee from paying duty at dyeing stage and adjudicating the above Show Cause Notice. Ultimately, the order was set aside by the Commissioner(Appeals). Accordingly, he has observed that in such a situation, it cannot be denied that the department had a full knowledge that the assessee was carrying out dyeing process on the yarn manufactured by them. Accordingly, he held that the demand was hit by time bar and dropped the demand of Rs.17,96,096/- (Rupees Seventeen Lakhs, Ninety Six Thousands and Ninety Six only). However, in respect of the demand raised on the y....
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....eal was filed by the Revenue against that part of the earlier order of Commissioner vide which he dropped part demand of amount Rs.17 lakhs (Rupees Seventeen Lakhs only), on the ground of limitation. 6. After going through the impugned order of Commissioner, we note that he has accepted the respondent s stand that the provisions of erstwhile Rule 6(b)(ii) of Central Excise Valuation Rules, 1975, cannot be adopted in preference to Rule 6(b)(i) when the price of the comparable goods is available. As such, by taking note of the price of identical goods being manufactured by M/s Soma Textiles located near the respondent s factory, he held that inasmuch as the same is available, there is no need to resort to the provisions of Rule 6(b)(i....
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....e Board s circular, it stand contended that the said circular stipulated that the cost of production of captively consumed goods be calculated henceforth in accordance with CAS-4 for non-inclusion of overhead expenses not related to the production. Accordingly, it stand pleaded that the word henceforth suggest that the said circular has prospective applicability whereas in the instant case, the demand pertains to the period prior to issuance of said circular. 8. We do not find any merits in the above contention of the Revenue. Admittedly, the Commissioner has taken into account the cost of the yarn of same count being manufactured by M/s Soma Textiles. Reference by Revenue to the various technical parameters is only an expression of....
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....matter, the said circular only reflects upon the correct principles of arriving at cost of the product. It cannot be said that the said principles were different prior to the issuance of said circular and were different after the issuance of said circular. We find no merits in the above contention of the Revenue. 9. We further note that the demand stand dropped by the Commissioner even on the point of limitation. He also observed that the respondent was regularly filing the monthly RT-12 returns, showing captively consumed quantity of yarn along with price declared. In respect of the duty on dyeing and sizing of yarn, he observed that the respondents had filed classification list clearly mentioning the process of dyeing and sizing c....
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.... narrated therein, we also take note of the fact that in the earlier order, the Commissioner had extended the benefit of limitation to the respondent while dropping the demand of duty of Rs.17,96,096/- (Rupees Seventeen Lakhs, Ninety Six Thousands and Ninety Six only) in respect of yarn manufactured by the appellant and dyeing the same in their factory for further captive consumption. The said part of the earlier order of the Commissioner was not appealed against by the Revenue before the Tribunal. However, as the Commissioner in the earlier order had not extended the benefit of limitation to the yarn purchased from outside and subjecting to the process of dyeing and sizing, the said part of the order confirming demand of duty was challenge....