Case Law Details
Avon Steel Industries Pvt. Ltd. Vs Commissioner of Central Excise (CESTAT Chandigarh)
CESTAT Chandigarh held that duty demand valuing goods cleared to sister concern in term of rule 8 of the Central Excise (Valuation) Rules, 2000 (CVR, 2000) without any reasonable justification and without providing report of Deputy Director (Cost) is unsustainable in law.
Facts- The appellants are engaged in the manufacture of “HR Coils”; they sell the coils to related as well as unrelated parties. On conduct of an audit of the appellants, Revenue came to the conclusion that the appellant is clearing part of the final goods to their sister concerns and therefore, the valuation of the goods removed to the sister concerns should be, on the basis of cost plus 10%,in terms of Rule 8 of Central Excise (Valuation) Rules, 2000.
A show-cause notice demanding duty of Rs.43,52,529/- along with penalty and interest was issued to the appellants; the show-cause notice was adjudicated vide OIO wherein duty of Rs.29,17,703/- was confirmed under the extended period along with equal penalty u/s. 11AC of the Central Excise Act, 1944.
Conclusion- Held that as contended by the learned Counsel for the appellants, the report of the Deputy Director (Cost) was not provided to the appellants; the working papers on the basis of which the Deputy Director (Cost) has arrived at the figures are also not given; the same are not even explained in the show-cause notice. We find that this is a serious case of violation of principles of natural justice as the appellants have been denied an opportunity to analyse or counter the findings of the Deputy Director (Cost).
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