TaxTMI 
TaxTMI 
2016 (7) TMI 347
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....ant (M/s Rajalakshmi Industries Ltd.) was alleged to have undervalued the processed fabrics by way of not declaring correct value of grey fabrics. On investigation, it was noticed that the merchant manufacturers were under valuing the grey fabrics sent to main appellant for processing and the main appellant has discharged the duty liability on the value given by the merchant manufacturers and their processing charges. A show-cause notice was issued demanding CE duty and also to disallow/recover deemed credit along with interest and impose penalty on the main appellant as well as the individual, who was the Director of the main appellant during the relevant period. The adjudicating authority after following the due process of law, confirmed ....
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....ty is to be paid. 4. Learned AR, on the other hand, would submit that the merchant manufacturers have clearly admitted in the statements recorded that there was under valuation and they had purchased the grey fabrics at higher price and the price at which it was declared to the main appellant was less in order to avoid/evade payment of less Central Excise duty. It is his submission that the main appellant as well as the Director of the company were in the business of processing of fabrics and should have noted value of grey fabrics as declared is very much incorrect and should have asked for the correct value from the merchant manufacturer. 5. On careful consideration of the submissions made by both sides, we find that the issue involved ....
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....gainst the main appellant to demand the Central Excise duty from him. In the entire case records, there is nothing to show that the main appellant was aware of the fact that the merchant manufacturers have not stated the correct value of grey fabrics. We find that Apex Court in the case of S. Kumars Ltd. (supra) has categorically settled the law that in the case of processing of fabrics, the valuation is to be based on the deemed price comparison of value of fabrics in any of the processors + value of job work. Coming to such a conclusion, the Apex Court relied upon the decision in the case of Ujagar Prints first and second decision. We find that this Tribunal in the case of Madhu Tex Industries Ltd. (supra) has an identical issue, held as ....
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....t short payment of central excise duty. The appellants only have filled the value appearing in the grey bills, provided by the merchant-manufacturers, which cannot be considered as manipulation. The above facts have not been disputed by bringing in any contrary evidence by the Revenue. Rather the Lower Authorities have conveniently ignored the factual position and hence, findings have no basis. 9. During the relevant period, the Tribunal in series of judgements has clearly held that for wrong declaration of the value by the supplier, extended period is not available for recovery of the duty from the job workers. In this connection, the following judgements were relied upon by learned Advocate in support. (i) Nikharka Dyg. & Ptg. - 200....