TaxTMI 
TaxTMI 
2018 (11) TMI 151
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....various parts of wagons are being manufactured and from this unit, the parts are cleared to their second unit (Unit-2) which is situated at Santragachi. In Unit-2, railway wagons are manufactured and cleared to Indian Railways and others. The dispute is covering the period August 1998 to April 1999 and July 2000 to March 2001. The valuation of parts cleared from the Unit-I to Unit-2 is under dispute in the present case. For the period prior to 01/02/2000 (when the Section 4 of the Central Excise, Act was amended), the appellant paid duty on the basis of cost of production but did not include the element of profit since the appellant was incurring losses during the relevant financial years. Revenue was of the view that value is required to b....
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.... that this is a Revenue neutral situation and under such circumstances there can be no allegation of suppression and the differential duty demand cannot be up-held. In this connection, he relied on the decision of Chennai Tribunal in the case of Anglo French Textiles Vs. Commissioner, of C. Ex., Puducherry, reported in 2018 (360) E.L.T. 1016 (Tri.-Chennai). He also added that the said decision was approved by the Hon'ble Supreme Court as reported in 2018 (360) E.L.T. A 301 (SC). 5. The argument advanced by the Ld. DR, in the impugned order is summarized below:- (i) He argued that the Revenue neutrality has never been argued by the appellant as part of the grounds of appeal. He added that the only grounds advanced in the grounds of app....
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....he reason that the appellant was incurring losses during the relevant period. There have been various percentages mentioned regarding the notional profit to be added. Ultimately, the issue has been remanded to original authority for the determining the appropriate margin and re-determination of value. For the period after 01/07/2000, he upheld the re-determination of value in terms of Rule 8 (iii) of Central Excise, Valuation Rules, 2000. 8. The re-determination of value and the demand for differential duty has been challenged with the legal argument that the situation is one of revenue neutrality. It is not in dispute that the Central Excise Duty paid on the goods at the time of clearance from Unit-1 will be available as Modvat credit f....
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....evenue neutral situation and therefore the demand of duty is unjustified. He relied upon the decision of the Larger Bench in the case of Jay Yuhshin Ltd. v. Commissioner of Central Excise, New Delhi - 2000 (119) E.L.T. 718 (Tri. - LB). 3. The Learned AR Shri S. Govindarajan reiterated the findings in the impugned order. He relied upon the decision of the Tribunal in the case of BOC India Ltd. v. Commissioner of Central Excise, Jamshedpur - 2004 (168) E.L.T. 478 and contended that when goods are transferred to sister unit, the valuation has to be under Rule 8 of Central Excise (Valuation) Rules and therefore it should be 115% of the cost of production. That therefore, the demand raised is legal and proper. 4. We have heard the submissi....