2017 (9) TMI 20

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.... raw materials from M/s. HLL for the manufacture of Mixed Odoriferous Substances which is the main ingredient for manufacture of soaps. On the basis of intelligence that the appellant after job work have undervalued the goods, a surprise visit was conducted at the premises of the appellant and documents were recovered. It was revealed that for the manufacture of Mixed Odoriferous Substances, M/s. HLL MOS Unit gives the formulation to the appellant. The raw materials are supplied by M/s. HLL MOS Unit to the appellant. The Mixed Odoriferous Substances manufactured as per the formulation provided by M/s. HLL MOS unit are cleared on stock transfer basis to various HLL Units and to some other job workers of HLL situated at various places in the ....

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....by M/s. HLL MOS Unit. It was found that the value adopted for the clearances of Wheel Green and Wheel Blue Lime by appellant, after job work, were undervalued and the assessable value adopted was not in terms of Rule 11 r/w Rule 6 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, for the period January 2003 to December 2006, by not including the correct costs in the value as required by law. Thus, it appeared that the appellant had contravened the provisions of Rule 4(1) and Rule 6 of the Central Excise Rules, 2002 and a show cause notice was issued raising the above allegations and demanding differential duty of Rs. 63,57,209/- along with interest and also for imposing penalties. After due process of law,....

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....hat on this ground alone, the demand is not sustainable. 3. Further, out of the 15 products, value of 13 products was higher than the actual value arrived at by M/s. HLL based on actual costing and the allegation is only with respect of two products. This itself shows the bonafides of the appellants as well as HLL. Again the final products are cleared on the basis of MRP and therefore all element of costing is included in such MRP. 4. The ld. Counsel also argued on the ground of limitation and submitted that when the credit is admissible to own/sister unit and are job workers who manufacture goods for HLL, and pay duty on HLL s MRP, the demand raised is unsustainable. That there is no ground for imposing penalty and may be set aside. ....