COMMISSIONER OF C. EX. Vs. GREAVES COTTON LTD.

JUDGEMENT

(1.) THIS is an appeal filed by the Revenue against the order of the Commissioner (Appeals). Brief facts of the case are that the respondents were manufacturing 'diesel engine model FL -400' and were clearing the same to a related party viz. M/s. Piaggio Greaves Ltd., Baramati.

(2.) The period of dispute is 1 -7 -2000 to 31 -8 -2001. They were paying the duty on a value arrived on cost construction basis, i.e. as per Section 4(1)(b) of the Central Excise Act, 1944' read with Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000.

(3.) THE respondent's contention is that the material cost has come down as in the beginning, for few months, they were using the imported material while later on, they started using the indigenous material. The respondent's another contention is that if the cost audit report dated 30 -9 -2001 is taken into account, which represents the actuals for the whole period, the total cost of production works out to Rs. 21,315/ - as against Rs. 24,677/ - on which they have paid duty. Yet another contention of the respondent is that certificate dated 7 -8 -2000 was based upon Estimation as per the situation at that time while certificate of cost auditor is based upon actuals for the whole period. We have gone through the order of the Commissioner (Appeals) and in our view, it is not appropriate on the part of the Revenue to take the material cost as per certificate dated 7 -8 -2000 and take the "other cost/overheads" on the basis of certificate dated 30 -9 -2001. In our view, the certificate dated 30 -9 -2001 represents the correct cost of production and we find that the said cost of production is less than the assessable value on which the respondent had paid duty. Under the circumstances, we do not find any merit in the appeal of the Revenue and accordingly the same is dismissed.