COLOUR CHEM LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) Heard Both sides.

(2.) This appeal is filed against an order dated 14.11.03 passed by the Commissioner of Central Excise, Thane -I. The appellant, M/s. Colour Chem. Ltd., Balkum, Thane (hereinafter referred to as "the assessee") situated at Mumbai - Agra Road, Balkum, Thane, is manufacturing textile dyes for M/s. Dystar (I) Ltd., only (hereinafter referred to as "DSIL") as per toll manufacturing agreement between them and M/s. DSIL. M/s. DSIL are supplying raw material alongwith technical know -how to the assessee. The assessee take Modvat/Cenvat credit on the inputs sent by M/s.DSIL and clear the final goods on payment of duty to M/s.DSIL. on payment of duty to M/s. DSIL i.e. textile dyes, the assessee first manufacture intermediate product i.e. lumps and extrude, falling under Chapter Sub -heading No. 3204.11 by using their own raw materials and clear the same on payment of duty taking the agreed value between them and M/s. DSIL. The assessee, then, avail Modvat/Cenvat credit on these intermediate products and manufacture the final product.

(3.) The assessee are clearing the intermediate product i.e. lumps and extrude for captive consumption on agreed prices/value between them and M/s.DSIL. The final goods in these cases are also manufactured as per the specification and requirement of Dystar and for which no market price is available as they are solely clear to M/s.DSIL. The assessee have failed to observe the provision of Rule 6(b)(ii) of valuation Rules, 1975 (upto 30.06.2000) and Rule 8 of Central Excise Valuation (Determination of Price of Exciseable Goods) Rules, 2000 ( for 01.07.2000 onwards). The assessee has also not filed the price declaration as required under Rule 173C of the Central Excise Rules, 1944 in respect of clearances of these intermediate goods, which are used captively for final products manufactured for M/s.DSIL and have thus willfully suppressed the fact deliberately with an intent to evade payment of duty. Therefore, the proviso to Section 11A(1) of the Central Excise Act, 1944 is correctly invokable in this case for demanding Central Excise duty for five years.