2019 (2) TMI 8

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....), 1985. 2.1 Pursuant to visit by Departmental Officers, the following facts emerged : (i) Appellants had removed their rubber compound to M/s. HSI Automotives Ltd ('M/s. HSI' for short) and M/s. HIS holds 100% of equity shares of appellant. Hence, appellant and M/s. HSI are related companies; (ii) Appellants are manufacturing and removing all the compounded rubber to their holding company M/s. HSI for use in the manufacturing of automobile components; (iii) The value adopted for the payment of duty by the appellant for the compounded rubber cleared to M/s. HSI was below 110% of the cost of production. 2.2 The Department took the view that appellants have not followed valuation of such clearances as per Cost Accounting Standa....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....irement. Such assessable value was worked out to around 103% of the cost of production; (ii) However, pursuant to the visit of the Departmental Officers, the appellants have agreed to follow CAS-4 method of valuation and had appointed an independent Cost Accountant for that purpose. (iii) Accordingly, the appellants have paid up the amount of Rs. 5,25,85,400/- through CENVAT Credit. They have paid the same before the issuance of the Show Cause Notice dated 01.05.2015. They have also paid up the amounts proposed to be demanded in the three Statements of Demand proximate to their issue. Hence, the short payment was only due to a wrong practice adopted by the appellants. There was no intention to evade payment of duty. (iv) In any cas....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....irlon Ltd. (supra), the Hon'ble Supreme Court noted that the important question in such matters is "about the intention, namely, whether it was done with bona fide belief or there was some mala fide intention in doing so." The Hon'ble Apex Court in that judgement also held that when "the entire exercise was revenue neutral, the appellant could not have achieved any purpose to evade the duty." We find that in the present appeal before us also, revenue neutrality is very much present since the goods manufactured by the appellant were removed only to their holding company M/s. HSI. It is true that the appellants have calculated the assessable value only at around 103% of the cost of production instead of 110%, as required by CAS-4 valuation me....