TaxTMI 
TaxTMI 
2018 (8) TMI 1565
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....eling, rewinding, doubling of cotton yarn received from their sister units/group companies. The appellants were also sending cotton yarn for further processing to these sister/group units on job work basis. Department took the view that the appellant had not adopted correct assessable vale in respect of such transactions and that valuation should have been done as per Rule 9 r/w Rule 8 of Central Excise (Valuation) Rules, 2000, herein after referred to as CEVR, 2000; that assessable value will be 115% of the cost of production of such goods. Accordingly show cause notice dated 26.9.2006 was issued to Unit - I proposing recovery of differential central excise duty amounting to Rs. 32,44,871/- with interest thereon and imposition of penalty u....
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....ules, clearances to interconnected parties will have to be assessed as if the transactions are at arm's length. This is the principle which is clearly conceived under rule 10(b). If so, the value on the basis of cost of raw materials and conversion charges have to be accepted. 2.4 The present impugned order is inconsistent with the stand of the department taken in the earlier case i.e. in M/s. Kandagiri Spinning Mills Ltd. 2.5 The appellants have discharged duty on the basis of the Board Circular No. 619/10/2002-CX dated 19.02.2002. In that circular, the Board was pleased to clarify that in respect of goods manufactured on job work, valuation would be under Rule 11. The Circular of the board has not been withdrawn and is binding o....
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....f limitation by wrongly alleging fraud or suppression. 3. On the other hand, ld. AR Shri S. Govindarajan supported the findings in the impugned order. 4. Heard both sides and have gone through the case records. 5. We first intend to take up the plea of the appellants per se being hit by limitation. 5.1 The Ida counsel for appellants has drawn attention to the Order-in-Appeal No. 56/2005-CE SLM dated 28.4.2005 of the Commissioner (Appeals), Salem of Kandagiri Spinning Mills and argued that the impugned order is inconsistent with the stand of department in the said case. As per the facts, M/s.Kandagiri Spinning Mills Ltd. a sister /group unit of the assessee, also had two units under the name and style of M/s. Kandagiri Spinning M....
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....oo is not in order and is also therefore set aside." 5.2 There is nothing on record to show that the department has filed appeal against this order of Commissioner (Appeals). This being the case, we find that the ratio laid down by the Hon'ble Supreme Court in a number of judgments for example, Marsons Fan Industries Vs. Commissioner - 2008 (225) ELT 334 (SC) and Jayaswals NECO Ltd. Vs. Commissioner - 2006 (195) ELT 142 (SC) will apply. Hence, we find merit in the appellant's contention that it is not open for the department to take a different stand subsequently in respect of sister unit of assessee on the very same issue on which a contrary stand had been taken earlier. 5.3 Viewed in this context, we find that the Show Cause....
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....ted in 2005 (190) ELT 145 (SC) allowed the appeal of the department holding that "deemed price" principle of Ujagar Prints does not apply to processor who is not independent; it is also inapplicable when processor is not a mere processor but also a merchant-manufacturer. Hence the law is finally settled as now against the appellant on merits. However, it is to be kept in mind that the said judgement was rendered later to the period of dispute in the present appeals which is 1.10.2001 to 31.5.2003. Till the judgment of the Hon'ble Apex Court, the decision of the Tribunal in S. Kumar holding that the ratio in Ujjagar Prints would apply prevailed. Hence, the entire issue having been mired in litigation till the law was finally settled by t....