HANSAFLON PLASTOCHEM LTD. Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) The duty demand in the present case is in respect of Poly Tetra Fluoro Ethylene Coatings (PTFE) manufactured by the appellant during the year 1994 -95. This case had come up before us earlier and we had remanded the matter for fresh consideration vide our Final Order No. 218/2001 -A, dated 21 -5 -2001 with the following observations.

(2.) The present grievance of the appellants is that the remand order passed has not gone by the above direction given by this Tribunal and has again fixed the value and turnover in respect of PTFE based on Schedule 7 to their Balance Sheet. The appellants have pointed out that this has resulted in gross over estimation of the value of the PTFE produced by them. The learned Counsel for the appellants pointed out that Schedule 7 included the appellant's trading activity in finished leather as well, while the subject matter of the excise proceedings could have been only in respect of PTFE. He has pointed out that, according to the Balance -Sheet, total quantity of PTFE produced by the appellants in the financial year was only 3084 Kgs. Part of the production was sold and the remaining used for coating of utensils on contract basis. The appellants' sale price of PTFE was below Rs. 1000 per Kg. is clear from the contemporary invoices. The sale price of the competitors was also comparable. In these circumstances, the only reasonable course for the Revenue authorities was to value the total production of 3084 Kgs. at the sale price of Rs. 1000 per Kg., treat the same as cum -duty price and levy central excise duty, if any, payable, after allowing them the small -scale exemption towards clearances up to an aggregate value of Rs. 30 Lakhs in a financial year. The learned Counsel has submitted that if such an estimation was carried out, it would be clear that the appellant's total production of PTFE remained within the fully exempted limit and no duty was attracted.

(3.) We have perused the records and have heard both sides. The computation of value of PTFE produced by the appellant in the impugned order is patently erroneous. Their Balance -Sheet included appellant's trading value in other goods. Those goods had no place in determining duty liability on the goods manufactured by the appellants. The balance -sheet relied upon by the Revenue also indicated the total quantity of PTFE manufactured by the appellant. They had sold part of PTFE produced by them to independent buyers during the relevant period. Those prices clearly reflected the normal price of the goods. The appellants are right in their submission that the value of their annual production of PTFE, including for the quantity captively consumed for coating of utensils by the appellant, should have been computed based on the unit sale price observed in respect of the quantity sold and not in the unreliable way in which the Revenue Authorities have gone about computing the value. The valuation canvassed by the appellant is clearly in line with Section 4 of the Central Excise Act and Rule 6 of Valuation Rules. It is also clear that upon a proper valuation of the appellants' production during the relevant financial year, their production was within the exempted value limit of Rs. 30 Lakhs. In these facts and circumstances, the adjudication order was clearly in error in holding that there was evasion of duty, which made the appellant liable to penalty and other consequences as well. The impugned order is, therefore, set aside and the appeal is allowed with consequential relief, if any, to the appellants.