Central Excise Appeal No. 112 of 2011. Case: Commr. of Cus. & C. Ex., Hyderabad Vs Mahalakshmi Profiles Ltd.. High Court of Andhra Pradesh (India)

Case NumberCentral Excise Appeal No. 112 of 2011
JudgesGoda Raghuram and Ashutosh Mohunta, JJ.
IssueCentral Excise Act, 1944 - Section 11AC
Citation2012 (279) ELT 355 (AP)
Judgement DateAugust 04, 2011
CourtHigh Court of Andhra Pradesh (India)

Judgment:

(At Hyderabad)

  1. This is an appeal by the Revenue under Section 35(G) of the Central Excise Act, 1944 (for short ''the Act'') against the Order dated 27-12-2007 passed by the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Bangalore (the Tribunal) in Appeal No. C/768/07 rejecting the appeal of the Revenue against the order dated 9-7-2007 passed by the Commissioner of Customs, Excise and Service Tax (Appeals-I) in Order-in-Appeal No. 24/2007 (H-I) CE.

  2. The respondent is a manufacturer of HR tubes/pipes falling under Chapter Heading No. 7306.90 of the Central Excise Tariff Act, 1985. Apart from factory gate sales, the respondent is clearing the finished goods to consignment agents also on payment of duty. Based on intelligence gathered that the respondent is selling its goods through consignment agents, who are adopting values higher than the values on which duty was being paid at the factory gate. Officers of Central Excise, Anti-evasion Division, Hyderabad-I Commissionerate, visited the unit as well as its registered office on 26-2-2003 and verified the stocks of inputs and finished products, which were found to tally with the book balances. On verification of the sale patties of the consignment agents and the invoices submitted by the respondent on 6-10-2006, it was observed that the values adopted by the respondent are lesser than those adopted by the consignment agents at the time of sale of goods at or about the same time in respect of the goods cleared from the factory. Since the goods are not sold at the factory gate, but are transferred to consignment agents'' premises on stock transfer basis, the Revenue felt that the value cannot be determined under clause (a) of sub-section (1) of Section 4 of the Act, but must be determined as per Rule 7 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 read with clause (b) of sub-section (1) of Section 4 of the Act. Eventually, a show cause notice was issued as to why an amount of Rs. 4,29,441/- for differential duty on excess value received on the clearance of goods through the consignment agents'' during the period from 1-10-2005 to 31-3-2006 be not paid by the respondent; why interest at the applicable rate should not be demanded on the demanded amount, under Section 11AB of the Act; why a penalty equivalent to the duty determined should not be imposed under Section 11AC of the Act; and why...

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