TaxTMI 
TaxTMI 
2002 (2) TMI 198
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....a chemical factory at Barabanki. In their distillery the appellants manufacture Ethyl Alcohol-Denatured (for short SDS). The SDS is stock-transferred to their Barabanki unit where it is wholly consumed in the manufacture of specified chemicals. Under the impugned order, the differential duty demand of Rs. 14,89,61,104.00 has been confirmed by the Commissioner on the entire quantity of SDS transferred from Captainganj unit to Barabanki unit during the period from April, 1994 to December, 1999. Aggrieved by the above, the assessee has filed the present appeal. 3. Show cause notices were issued for different periods as follows :- S. No. Show Cause Notice No./Dt. Period Differential duty 1 C. No. VI (MP) Demand (12)ADJ-116/....
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....m dated 14-1-2000, sale price fixed at Rs. 14.25 was corrected as Rs. 15/-. On this basis, the differential duty demand, as mentioned, was made. The appellant contended before the adjudicating authority that the entire quantity of SDS manufactured at its distillery is being consumed at Barabanki unit for manufacture of specified articles. Molasses which is the major raw material for manufacture of SDS was obtained by the appellants at controlled rate in terms of the provisions of U.P. Molasses Control Order, 1964 but other distilleries manufacturing Ethyl Alcohol for non-specified purposes had to purchase molasses at market determined prices. Therefore, there could be no comparison between the cost of production of SDS by the appellants and....
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....hich one of the manufacturers sold SDS on a particular date is totally illegal. It was further contended that for the period from April, 1999 to December, 1999 the appellants had paid on a higher assessable value than what was proposed in the show cause notice. Therefore, there is no basis for demanding differential duty during this period. The adjudicating authority did not accept any of the contentions raised by the appellants. The Commissioner of Central Excise, therefore, confirmed the differential duty demand of Rs. 14,89,61,104/- and imposed penalty amount equal to the duty demand by invoking Section 11AC. 7. We will first refer to the case put forward by the appellants regarding the demand for the period April, 1999 to Decem....
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....se as value of comparable goods manufactured by the assessee is not available in the present case. Therefore, according to him, the assessee has correctly proceeded to determine the value on the cost of production basis. There is no case for the Revenue that the cost of production has been wrongly calculated by the assessee. On the other hand, the contention is that value of comparable goods manufactured by the assessee is available and therefore, the assessable value has to be arrived at by applying Clause (i) and not Clause (ii). The department had adopted the highest price prevailing on a particular day in an year in the case of one of the other three manufacturers in the vicinity as the value of SDS cleared by the appellants. The conten....
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....epartment." 9. The above would show that the Commissioner has relied on contractual prices without examining the terms of the contract. A reference to Annexure to the show cause notice relating to the price of SDS sold by M/s. Saraya Distillery would show that the price varies between Rs. 12/- to Rs. 20/- during the period from 1-3-94 to 30-3-95. From 25-4-95 to 25-3-96 it varies between Rs. 5.50 to Rs. 12.90. For the period from 4-5-96 to 20-3-97 the price varies between Rs. 4.20 to Rs. 14/-. For the period from 16-5-97 to 27-12-97 the variation is between Rs. 10/- to Rs. 14.75. There is no reason given by the Revenue as to on what basis the highest price of particular day in each year was taken into consideration for the purpose ....