SKYWAY STEEL INDUSTRIES Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) THE facts leading to filing of this appeal and stay application are, in brief, as under. The appellant are manufacturers of Alloy and Non -Alloy Round chargeable to central excise duty under Chapter 72 of the Central Excise Tariff. The Round are manufactured from the M.S. Ingots/billets. The other raw materials for manufacture of rounds are furnace oil, coal, consumables and lubricants, etc. besides electricity. The period of dispute in this case is from 2007 -08 to 30 -11 -2012. The appellant were availing Cenvat credit of central excise duty paid on inputs and capital goods and of service tax paid on input service used in or in relation to the manufacture of final products.

(2.) THE department, on finding that the percentage of duty payment through PLA during 2007 -08, 2008 -09, 2009 -10, 2010 -11 and April to November, 2011 was 0.75%, 3.05%, 5.40%, 6.20% and 2.97% respectively, initiated inquiries to ascertain the reasons for the same. On the basis of the inquiry, the department was of the view that the value addition shown by the appellant during the period of dispute was very low and as such, the appellant appeared to have under -declared the assessable value of the goods on which the duty was being paid. It was alleged that the appellant declared only that much value of their final products so that the duty liability could be discharged -through Cenvat credit and only negligible amount is required to be paid through PLA. The department was of the view that the correct value addition during 2007 -08, 2008 -09, 2009 -10, 2010 -11 and April, 2011 to November, 2011 should be Rs. 2,048/ - P.M.T., 2701 PMT, Rs. 2,286/ - PMT, Rs. 1,942/ - PMT and Rs. 2,098/ - PMT. Respectively and on this basis, the total value addition during these periods should be Rs. 2,12,35,412/ -, Rs. 3,57,04,519/ -, Rs. 3,38,78,520/ -, Rs. 3,37,69,438/ - and Rs. 2,56,20,776/ - respectively. Accordingly, the department determined the duty on this value addition, which according to the department was required to be paid through PLA and on comparing the same with the duty actually paid through PLA during these periods, the department determined that central excise duty amounting to Rs. 81,28,907/ - has been short paid. Accordingly, on this basis, a show cause notice dated 21 -3 -2012 was issued to the appellant for demand of the above mentioned duty amount along with interest and also for imposition of penalty on them under Section 11AC.

(3.) IN this order the Commissioner held that the declared assessable value of the appellant's product is not correct, that the same has been under declared, inasmuch as the price is not the sole consideration for the sale. Against this order of the Commissioner, this appeal has been filed along with stay application.