2015 (12) TMI 731

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....sued proposing demand of duty alongwith interest and to impose penalty on the ground of undervaluation of the goods. It has been alleged that the appellants paid the duty on their own calculation and they have not followed the provisions of Rule 8 of Central Excise valuation (Determination of Price of Excisable Goods) Rule 2000 and CAS-4 in respect to clearance of the goods to their sister unit during the period from December 2001 to March 2006. The Adjudicating Authority confirmed the demand of duty of Rs. 14,00,831/- alongwith interest and imposed penalty on the appellant company. 2. The Learned Counsel on behalf of the appellant submits that during the period 2001-02 and 2002-03, they had not any independent sale and therefore, they are....

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....es the findings of the Adjudicating authority. He submits that for the first two years, they have not followed Rule 8 of the Valuations Rules and CAS-4 system and therefore it would apply for the subsequent periods. He further submits that for the 3rd year sale to the independent buyer is about 3%, which cannot be accepted as sale to the independent buyer. 4. After hearing both the sides and on perusal of the records, we find that the Larger Bench of the Tribunal in the case of M/s Ispat Industries Ltd (supra) held that transfer part of production to another plant of same assessee and balance production sold to independent buyers, Rule 8 could not be applicable and value could be determined by the assessee under Rule 4 of the Valuation i.e....

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.... that the wholesale price should be taken on the basis of cash payment thus eliminating the interest involved in wholesale price which gives credit to the wholesale buyer for a period of time and that the price has to be fixed for delivery at the factory gate thereby eliminating freight, octroi and other charges involved in the transport of the articles. As already stated it is not necessary for attracting the operation of s. 4 (a) that there should be a large number of wholesale sales. The quantum of goods sold by a manufacturer on wholesale basis is entirely irrelevant. There are facts that such sales may be few or scanty does not alter the true position." 5. In view of the decision of Honble Supreme Court, in the case of M/s A K Roy an....