2018 (1) TMI 262

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....cate for respondents and have gone through the impugned order. 3. As per facts on record, the respondent is engaged in the manufacture of S C valves, pressure regulators, head lamps and parts thereof railway clips. The respondents were availing the credit on inputs used for manufacturing of finished goods. 4. During the course of manufacture of final product, brass scrap comes into existence, which was being cleared by them on payment of duty for conversion into brass rods. The records of the respondents were resumed on charge of undervaluation of brass scrap generated in their factory and on scrutiny of the balance sheet for the year 1996-97 to 2000-01 and inventory summaries showing the position of their closing stocks, it was notic....

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.... set aside the adjudication order. Aggrieved from the said order, the Revenue is before us. 5. Learned AR appearing on behalf of the Revenue submits that the Commissioner (Appeals) has set aside the adjudication order on three grounds: (a) figures of balance sheet cannot be taken as assessable value (b) there was situation of revenue neutrality and (c) the extended period of limitation is not invokable. 6. It is his submission that the Revenue has obtained a comparable price from M/s.Hindustan Wires, Faridabad to ascertain proximity of value of mixed brass scrap and if the same is to be considered, the value shown in the balance sheet by the respondent is correct value and on that value the respondent is req....

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....he respondent had paid higher duty on brass scrap, in that circumstance, the respondent was required to pay less duty on the job worked goods. He further submits that the activity of the respondent of clearance of brass scrap at lower price was known to the department, therefore, the extended period of limitation is not invokable. He also submits that the value shown in the balance sheet cannot be the price for sale of the goods as held by the Apex Court in the case of CCE, Vapi Vs. Synlab Sales-2015 (318) ELT 38 (SC). He, therefore, prayed that impugned order is to be affirmed. 8. On careful consideration of the submissions made by both sides, we find that the issue before us is as under: Whether in the facts and circumstances ....

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..../paid duty at the differential value of brass scrap. Therefore, from the illustration, it is clear that the respondent has suffered duty on final product i.e. the brass rod although clearing the brass scrap at lower price. In that circumstance, there is no loss of revenue to the department. Otherwise, if the respondent has cleared the brass scrap @ Rs. 86 per kg and at the conversion charge Rs. 14/- per kg and paying duty @ Rs. 100/-. The net result would the same. As the finished goods has suffered duty @ Rs. 100/- per kg in both cases, therefore, it is a situation of revenue neutrality and there is no loss of revenue to the department. In that circumstance, the charge of undervaluation is not sustainable against the respondent. We further....