2007 (11) TMI 24

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....ring units- a distillery at Captainganj and a chemical factory at Barabanki. In their distillery the respondents manufacture Ethyl Alcohol-Denatured (for short 'SDS'). The stock of SDS is transferred to their Barabanki unit where it is wholly consumed in the manufacture of specified chemicals. Under the order of the adjudicating authority the differential duty demand of Rs. 14,89,61,104.00 was confirmed on the entire quantity of SDS transferred from Captainganj unit to Barabanki unit during the period from April 1994 to December 1999. Aggrieved by the above, the assessee filed the appeal before CEGAT. Show cause notices were issued for different periods as follows : S. No. Show cause notice No. Dt. Period Differential duty ....

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.... -do- 20-3-1999 Rs. 14.25 8/99 to 12/99 -do- 10/99 Rs. 14.25   4. Thereafter, by a corrigendum dated 14-1-2000 sale price fixed at Rs. 14.25 was corrected as Rs. 15/-. On this basis, the differential duty demand, as mentioned, was made. The respondents contended before the adjudicating authority that the entire quantity of SDS manufactured at its distillery is being consumed at Barabanki unit for manufacture of specified articles Molasses which is the major raw material for manufacture of SDS was obtained by the respondents at controlled rate in terms of the provision of U.P. Molasses Control Order, 1964 but other distilleries manufacturing Ethyl Alcohol for non-specified purposes had to purchase molasses at mar....

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.... ltr. 4/99 to 7/99 Rs. 17.43 per ltr. 8/99 to 12/99 Rs. 17.43 per ltr. 6. The respondents further contended that proposal in the show cause notice to fix the assessable value on the basis of the highest price at which one of the manufacturers sold SDS on particular date is totally illegal. It was further contended that for the period from April 1999 to December 1999 the respondents had paid on a higher assessable value than what was proposed in the show cause notice. Therefore, there is no basis for demanding differential duty during this period. The adjudicating authority did not accept the contentions raised by the respondents. The Commissioner of Central Excise, therefore, confirmed the differential duty demand of Rs. 14,8....

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....inction by submitting that the product was captively consumed. CEGAT appears to have taken the stand that one day high price cannot be applied even though Rule 6(b) may apply. There is no dispute relating to the period from April 1999 to December 1999. For the period from April 1994 to February, 1999 the same was covered by a show cause notice dated 26-3-1999 and for the period March 1999 it is covered by a show cause notice dated 31-8-1999. CEGAT had come to the conclusion that no principle has been formulated and expressly no reason has been given. The stress is on nearly ascertainable equivalent as the expression 'ascertainable' means ascertained. There may be different rates for different periods. There may be cases where even for the p....