TaxTMI 
TaxTMI 
2017 (1) TMI 651
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....the appellant had been clearing scrap at uniform rate of Rs. 7,825/- per metric ton from April 2000 and it was only after this was questioned that the rates were revised upwards to Rs. 9,310/- in May 2003 and thereafter steadily increased to Rs. 17,300/- in March 2005 implying that appellant had not been complying with the Central Excise (Valuation of Price of Excisable Goods) Rules, 2000. 3. The scrap generated by appellant was contracted by the foundries to M/s Sahajeevan Audhyogic Sahakari Sanstha Ltd to be taken over at the premises of appellant before cleaning, baling and transporting and it is alleged by the tax authorities in the notice that the deduction of transportation charges borne by supplier of market scrap for computing at the assessable value for clearance of scrap by appellant is not correct when baling charges have also been allowed as deduction. 4. It is common ground that the nature of transaction between appellant and foundries precludes the application of any rule other than rule 11 of Central Excise (Valuation of Price of Excisable Goods) Rules, 2000 which is the residuary method of valuation. We are, therefore, required to determine whether the adjudicatin....
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.... the rival contentions on the issue of the transactions being subject to duty and on the culpability in arranging the transaction to evade duty, the central issue appears to have been lost sight of. Appellant clears scrap on payment of duty and it is not germane whether they could have resorted to alternate transactions that would have precluded duty liability. It is more pertinent to ascertain if the discharge of duty liability was in compliance with the appropriate rules. Appellant did contend so in the proceedings leading to the impugned order. 8. Appellant clears scrap on payment of duty to their own foundry and receives the finished products, viz., castings for use in the undertaking that manufactures automobiles. The foundries also procure scrap from the market for utilisation in the production of castings that are, presumably, supplied to the undertaking that manufactures automobiles. There is no allegation that the foundries market their castings to other customers. It is moot whether the Central Excise Act, 1944 mandates the re-determination of duty in such circumstances and, if no purpose is achieved by such exercise, whether such academic endeavours are required to be p....
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....t one page is devoted to that finding that differential duty arises while three and half pages discuss the plea of limitation. Even if the noticee failed to provide adequate rebuttal to the allegations in the notice, by no stretch does the residuary rule of valuation stand on its own as it lacks any defining parameter. In the absence of any finding on the manner and validity of computation proposed in the show cause notice, there is nothing that we can apply our mind to ascertain the legality and propriety of the impugned order. A less than diligent approach to adjudication is manifest in the entire proceedings before the original authority and adds no credit to the individual or the high office that he adorned. 12. That we are not overreacting should be apparent in the relevant, and entire, portion that deals with the issue of short-payment viz., "32. I have gone through the impugned notice, the relied upon documents, the case records and the assessee s reply filed vide their letter No. AC/CEX/438/402 dated 24/09/2006. I am required to decide as to whether there has been under valuation of scrap by the assessee resulting in a duty demand and if so whether extended period is in....
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....see applied. They have misleadingly advanced the concept of the variation occurring due to transportation charges. Though the transportation charges would be higher from Mumbai to Pune, but when considering the fact that the entire consignments come in truckloads, the overall difference would be marginal since Mumbai is rather close to Pune. Further for the scrap dealers getting big orders from the assessee and staying as regular vendors for the assessee would be of a far greater importance than the minor freight costs. Hence, there is no tangible reason for difference in the comparable values of scrap. The reason advanced by the assessee is not correct and does not merit consideration. 35. Another noteworthy aspect is that the departmental officers visited the assessee s unit in March 2003 during which period the assessable value of scrap per metric ton was Rs. 7,825/-. However, the correction in the assessable value by the assessee immediately thereafter proves the charge of undervaluation. The assessee revised the assessable value to Rs. 9,310/- pmt wef May 2003 and to Rs. 10,874/- pmt wef Oct 2004 till it increased to Rs. 15,373/- pmt wef March 2004 and to Rs. 17,300/- pmt in....