TaxTMI 
TaxTMI 
2007 (10) TMI 76
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....sar Steel Ltd. (ESL), Hazira who were holding Central Excise Registration No., 9/94. ESL made an exit and HGPL took over the management and operation of the unit in 2000. HGPL were registered under a new Registration No. 7/2000. HGPL manufacture the pellets on their own account as well as on job work basis for other parties. As far as the present appeals are concerned, the issue is in respect of valuation of the pellets cleared through ESL on job work basis. The appellants HGPL received free of cost iron ore from ESL and they converted the same into pellets and cleared them. While clearing the iron pellets, they paid duty under Rule 8 of Valuation Rules, 2000 on the cost construction basis. They actually paid duty on 115% of the cost of pro....
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..../s. Essar Steel Ltd. under Rule 209A of the Central Excise Rules 1944 and Rule 26 of the Central Excise Rules, 2001 and 2002. 2. The appellants are highly aggrieved over the impugned order. Hence, they have come before this Tribunal for relief. 3. Shri M. Chandrasekharan, learned Sr. Counsel and Shri N.K. Jain, learned Counsel appeared on behalf of the appellants. Ms. Sudha Koka, learned SDR for the Revenue. 4. We heard both sides. The learned Sr. Counsel invited our attention to two orders passed by the Assistant Commissioner on finalization of provisional assessments for clearances affected to ESL from 1997-98 to 2002-2003. In fact there are actually two orders passed by the Assistant Commissioner on the finalization of provision....
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.... Ø The goods manufactured by HGPL on job work or conversion basis and supplied to ESL could not be assessed under Rule 8 of the Valuation Rules as the same were not manufactured by HGPL as its own goods or in its own account. Ø According to the department, the appellant HGPL should have adopted the valuation in terms of the Apex Court's decision in Ujagar Prints case. Ø It was also contended by the department that as per the conversion agreement entered into between HGPL and ESL, they were described as seller and buyer respectively. Therefore, in no case, it could be a case of consumption by or on behalf of the HGPL. Ø &n....
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....at the valuation method in terms of Ujagar Prints case would not be applicable for related person. So he relied on this decision to hold that the method adopted by them for valuation was correct. Further, he said that even though M/s. Stemcor Minerals Ltd. held 51% of the shares, they partly paid only Rs. 5/- of the face value of Rs. 8/-, whereas the shares held by ESL were fully paid at. Consequently, majority voting rights in the company were held by the ESL. In view of the above development, ESL can be said to control the appellant company. In view of these things, the appellant company and ESL are interrelated and once they are interrelated companies, they would be related within the meaning of Section 4 of the Central Excise Act. There....
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....o between ESL and them. In the conversion agreement, the appellant is described as seller and the ESL is described as buyer. This clearly indicates that these two entities are not related at all. It was also pointed out that the appellants were clearing iron pellets to other independent buyers as well as to some other units on job work basis. The method adopted by them for valuation in these cases is on the basis of the Ujagar Prints decision. Therefore, the appellants were very much knowing that the valuation method to be adopted cannot be under Rule 8. The case of the department is that the appellant had full knowledge of the valuation method. The departmental representative emphasized the point that the appellants had suppressed the fact....