TaxTMI 
TaxTMI 
2018 (12) TMI 424
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....ere Ingots and Billets are manufactured. A part of the sponge iron manufactured in the Raniganj unit is cleared to Burdwan unit on payment of duty for use in the further manufacture of goods. The main dispute in the present case is regarding valuation to be adopted for payment of duty on the sponge iron transferred to Unit-II. The Department was of the view that since the clearances are made to the appellant's own Unit-II, there is no sale and hence, the assessable value is required to be determined in terms of Rule 8 of the Central Excise Valuation Rules,2000. But the appellant paid duty for such clearances on the basis of the value at which duty was paid in respect of clearances to independent buyers from Raniganj Unit. Differential duty ....
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....d for differential duty was totally unjustified. He emphasized the fact that the sponge iron manufactured in the Raniganj Unit was cleared not only to the Burdwan Unit of the appellant, but also to other independent buyers. He stated that the values adopted for payment of duty for clearances to Burdwan Unit were in line with the values arrived at on the basis of estimation of cost of production. He relied on the decision of the Larger Bench of the Tribunal in the case of Ispat Industries Ltd. vs. Commr. Of Central Excise Raigad [2007(209) ELT 185 (Tri-LB)]. The Larger Bench had held that the provisions of Rule 8 of the Valuation Rules will not be applicable in a case where some part of the production is cleared to independent buyers. He sub....
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.... at which the goods have been cleared to the Burdwan Unit, needs to be verified by lower authorities and for this purpose he prayed that the matter may be remanded. 5. Heard both sides and perused the appeal records. 6. The bulk of the demand has been made on the issue of valuation. The final product i.e. sponge iron has been cleared from the Raniganj Unit to Burdwan Unit. Since such clearances do not involve any sale, but are in the nature of transfer, the valuation to be adopted for payment of duty is to be determined as per the Central Excise Valuation Rules, 2000. In the circumstances of the present case the question which arises, is whether for the clearances to Burdwan Unit, the duty may be paid at values adopted for clearances ....
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....e's own case, as reported in 2006 (202) E.L.T. 561, wherein the Court applied "The Gunapradhan Principle" in interpreting the Customs Valuation Rules. We have kept in mind the following observations of the Court in coming to our above conclusion : "26. In our opinion if there are two possible interpretations of a rule, one which subserves the object of a provision in the parent statute and the other which does not, we have to adopt the former, because adopting the latter will make the rule ultra vires the Act. 27.................. 36. In our opinion, the Gunapradhan principle is fully applicable to the interpretation of Rule 9(2). Rule 9(2) is subservient to Section 14. We must, therefore, interpret it in such a way as to make it i....
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....004 (M/T) Unrelated buyers at factory gate 195.330 9683.165 Cleared to Burdwan Unit 2081.300 11376.460 Total 2276.630 21059.625 9. In addition to above the appellant has submitted on the issue of valuation as follows before the lower authorities: "The Appellant submits that during 2002-2003, Raniganj unit has cleared 2081.300 MT of Sponge Iron to Burdwan unit which are valued at Rs. 1,04,06,500/-. Thus, value per metric ton of Sponge Iron comes to Rs. 5,000/-. The total duty paid on 2081.300 MT of Sponge Iron during 2002-2003 is Rs. 16,65,040/-. During 2003-2004, Raniganj unit has cleared 8459.064 MT of Sponge Iron to Burdwan unit which are valued at Rs. 5,04,75,235/-. Thus, average value per metric ton come....