2025 (8) TMI 253

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....ed in the impugned Order-in-Appeal reveal that Appellant-HML Hosur are manufacturers of power shaft transmissions falling under Chapter Heading No. 8483. For removal of their products to their sister unit ('Unit-II' for short) situated at Thiruvallur, the assessments were kept provisional due to non availability of actual cost of production and profit margin for the year 1999-2000. The provisional assessment was finalized and HML Hosur paid differential duty of Rs.52,36,787/-. After further scrutiny, it was noticed that in respect of clearances of Transmission Assembly model No. 6Y1633, 989624 and 8E1934, Unit-II had supplied raw materials free of cost for which the cost was intimated to HML Hosur. For the year 1999-2000, while arri....

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....Appellant and Ms. Anandalakshmi Ganeshram, Ld. Assistant Commissioner appearing for the Revenue, defended the impugned order, heard both sides. 5. The only issue is whether a loading of notional profit by invoking Rule 6(b)(ii) of Valuation Rules by the Revenue is justified? 6. The appellant claimed that their other unit was its job-worker which was not accepted by the Revenue and hence, the Adjudicating Authority in the Order-in-Original chose to invoke provisions of Section 4 read with Rule 6(b)(ii) of the Valuation Rules, 1975 ['Rules' for short] to demand differential duty which provides for loading 'notional profit' when raw materials are captivity consumed in the manufacturing of final products. Rule 6(b) reads thus: "6(b) where ....

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....the Hon'ble Supreme Court in the case of Ujagar Prints vs UOI reported in 1989 (39) ELT 493 (SC), the so-called procedure observed by the Lower Authority would not apply in cases where the Trader supplied the raw material on payment of duty, which is the case here and accordingly, the activity carried on by it was a job work. 8. From the documents available on record, we find that the Appellant-HML Hosur admittedly manufactured and cleared power shafts to its sister concern, i.e. unit II on payment of duty but the assessment was kept provisional alleging that it was 'inter-unit transfer'. It is the case of the Revenue that raw materials were received on FOC basis which was also not disputed by the appellant. It is the case of the Appel....