2005 (98) ECC 81 (Tri)

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL

West Regional Bench -- Mumbai

Mrs. Archana Wadhwa, Member (J) and Shri V.K. Agarwal, Member (T)

I.F.B. Industries Ltd.

Versus

Commissioner of Central Excise, Goa

Appeal No. E/1289/2002

[Arising out of Order-in-Appeal No. KKS/(39)/39/Goa/2002 dated 31.1.2002 passed by the Commissioner of Central Excise (Appeals), Mumbai]

Order No. A/974/WZB/2004 C-II, dt. 19.11.2004, Certified on 29.11.2004

Demand (C. Excise)

Goods were being sold to independent buyers, as such the same was required to be picked up as assessable value in the case of transfer to their sister unit -- In view of the Larger Bench of the Hon'ble Supreme Court in the case of CCE v. Mahindra & Mahindra Ltd. in Civil Appeal No. 487/2003, demand of duty confirmed.

Assessable Value (C. Excise)

Goods not sold -- Where the goods are not being sold, the value has to be adopted in terms of provisions of Valuation Rules -- Rule 6(b)(i) of Valuation Rules state that the value for such case has to be arrived at on the basis of the similar or comparable goods manufactured by the assessee and sold to others -- Rule 6(b)(i) of the Valuation Rules, 1975.

Appeal rejected

PRESENT :

Shri G.C. Biradar, Adv. for the appellant.

Shri Hitesh Shah, SDR for the respondent.

Per : Mrs. Archana Wadhwa

The demand of duty of Rs. 31,516 has been confirmed against the appellants for the clearances of the washing machines made to their sister concern during the period April 99 to January 2000 by adopting the assessable value at which the goods were being sold to independent buyers. In addition, penalty of identical amount has been imposed.

2. The appellants have not disputed the fact that identical goods were being cleared by them to their customers at a higher price. However, their contention is sales to their customers were inclusive of profit margin, whereas the transfer of the same goods to their Bhopal Unit, price is based on the cost data and profit margin is not added.

3. We do not find any force in the above contention of the appellants. Where the goods are not being sold, the value has to be adopted in terms of provisions of Valuation Rules, 1975. Rule 6(b) (i) of Valuation Rules state that the value for such case has to be arrived at on the basis of the similar or comparable goods manufactured by the assessee and sold to others. Undisputedly, the goods are being sold at higher price to other customers; as such the same is required to be picked up as assessable value in case of transfer to their sister unit.

4. The appellants have also challenged the above order on the point of limitation, inasmuch as the show cause notice was issued after the normal period of limitation. However, on being queried, the Ld. Advocate fairly agreed that the invoices showing the lower value in case of transfer to their Bhopal unit were not being placed before the Central Excise authorities. He, however, submits that whatever duty they would have paid at their end, the same was available to their Bhopal unit as modvat credit and, as such, their could be no intention to evade any duty on their part, justifying invocation of longer period of limitation. We do not find much force in the above contention of the appellants, as in a recent judgement in the case of Commissioner of Central Excise, Mumbai v. Mahindra & Mahindra Ltd., on 10.9.2004 in the Civil Appeal No. 487/03, Larger Bench of the Hon'ble Supreme Court has held that such a circumstances by itself cannot be made a ground to hold that there was no suppression on the part of the assessee.

5. In view of the foregoing, we confirm the demand of duty against the appellants. However, in the facts and circumstances of the case, the penalty is reduced to Rs. 15,000. But for the above modification in the quantum of penalty, the appeal is otherwise rejected.

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