2005 (7) TMI 195

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.... from M/s. Deccan Industrial Products Pvt. Ltd. (hereinafter referred to as 'DIPPL' for short) for the manufacture of 'Grooved Rubber Sole Plates and molded pads' meant for Indian Railways. After manufacture of the said products, DEPL used to sent the same to DIPPL. After further processing, DIPPL to clear the goods on payment of duty. DEPL took Modvat credit on the raw material received. Further they received Rs. 3.50 per pad as job charges. But while clearing the goods they paid duty only on the value which is equal to the Modvat credit taken on the input raw materials. In other words, they have not adopted the correct value as per Rule 6(b)(ii)) of the Central Excise (Valuation) Rules, 1975. The Revenue proceeded against the appellants a....

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....    Even when the department conducted audit, no objection was raised. (iv)       Even the Accountant General Audit was carried out, no objection was raised. (v)        Only on 14-10-99, the Department raised the issue. The appellants furnished a reply dated 18-1-2000. The Department had acknowledged the receipt of the letter on 19-1-2000. For 9 months the department did not take any action. On 25-10-2000, the department wanted cost data for certain models. In view of the damage due to flood in August 2000, most of the documents were lost and damaged. Hence, the appellants was not in a position to submit cost data for certain models. However in respect of ....

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....)      Jay Yuhshin Ltd. v. CCE, New Delhi [2000 (119) E.L.T. 718 (Tri. - L.B.)] 4.Shri R.V. Ramakrishnappa, JDR reiterated the points made in the adjudication order. 5.We have gone through the records of the case carefully.  The appellants have manufactured the goods out of the raw materials supplied by the DIPPL. They could have received the raw material by Rule 57F challan procedure and returned the goods after job work to the principal manufacturer without payment of duty. However in the present case, they have followed the procedure of taking Modvat credit on the inputs and paying duty only on the value equal to the Modvat credit portion. No doubt, this does not represent the correct value as per Sect....