2004 (8) TMI 253

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....unit namely, Kores (India) Ltd. (Chemical Division), Barium Carbonate Granulation Unit located in the same locality, either on payment of duty on stock transfer or without payment of duty by following the procedure prescribed under Chapter X of the Central Excise Rules, 1944. The rates adopted by them for clearance of Barium Carbonate to their Barium Carbonate Granulation Unit were found lower than the rates adopted for the clearance of the same product to independent buyers. Ld. Advocate pleaded that for clearing Barium Carbonate to their Granulation Unit, they have adopted average value of the Barium Carbonate of different grades. The Central Excise Officers on investigation found that the value adopted by the appellants was not in confor....

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....rds were called from them, therefore they continued to assess the duty on the average value taken by them. He relied on the following decisions - (i) Motherson Sumi Systems Ltd. v. Commissioner of Central Excise, Meerut - 2002 (147) E.L.T. 1121 (Tri. - Del.) wherein it was held that intention to evade payment of duty has to be determined in each case from the relevant facts and circumstances of the case. If the appellants had included the value of the free supplied material in the value of the wiring harness and if they were to pay duty including on that value, they could have taken Modvat credit on that components. Thus, they stood to no gain by the exclusion of the value of the freely supplied items. (ii) R.H. Industries v. CCE, Chand....

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....he conditions) the existence of an alternate scheme would not be an acceptable defence. Particularly for Modvat credit, it has to be shown that the revenue neutral situation comes about in relation to the credit available to the assessee himself and not by way of availability of credit to the buyer of the assessee's manufactured goods. He pleaded that in case the appellants have not followed the provisions of Rule 6(b)(i) of the Central Excise Valuation Rules, 1975, as the price for each grade of Barium Carbonate sold to the independent buyers were available, the same price should have been taken by the appellants for clearance to their own Granulation Unit. There is no provision in the Central Excise Rules for taking average value of d....