M.K. KOTECHA & ORS. Vs. CCE

JUDGEMENT

(1.) THIS is an appeal filed against the decision of Collector of Central Excise and Customs, Aurangabad made in Order -in -Original No. 10/CEX/95 dated 22.5.1995, thereunder he confirmed the short levy demanded under proviso to Section 11A of the Act and imposed a penalty of Rs. 2 lakhs. The appellant owns three units viz. M/s. Tapi RCC Pipe Products, Anjale, M/s. Sakari Cement Pipes Products, Sakri and M/s, Bamnod Cement Pipe Products Bamnod which manufacture RCC Pipes and Collars falling under heading 68.07. The appellant was executing works contract for various irrigation schemes of the Maharashtra State Scale Industries Development Corporation (MSSIDC for short). In the course of their works contract the appellants have to manufacture RCC pipes and collar". The appellant's 3 units manufactured RCC pipes and collars falling under heading 68.07 of the Schedule to CETA. They cleared the above goods to various societies under the lift irrigation scheme for their projects during the period April 1989 to 1992 filing the price list in part vi(b) proforma. On the basis of C.A. certificate they also claimed exemption. The show cause notice dated 14.8.1994 charged the appellants that they had suppressed the facts of clearing the goods at lower price by producing C.A. Certificate when comparable prices were available with intention to evade Central Excise Duty. Clearance of goods were at Nil rate of duty whereas they collected Central Excise duty at full rate availing the admissible slab when they have actually paid the concessional rate on pipes and collars supplied to them. The Show Cause Notice also mentioned the work sheet, showing the comparison among other things on ex -factory prices of 3 units of appellants with the ex -factory prices of District Schedule Rates (D.S.R.) of Maharashtra Water Supply & Sewerage Board, Jalgaon for the period 1990 -91, 1991 -92 and 1992 -93. The appellants filed the reply to the Show Cause Notice vide its letter dated 27.1.1995. The Collector by the impugned order gave personal hearing and discussed the provisions of Rule 4B of the Central Excise Valuation Rules. He held that the Valuation of the comparable goods have been undertaken. On that basis he rejected the claim of the assessee appellants and he confirmed the demand of Rs. 18,34,464/ - and levied penalty of Rs. 2 lakhs. Hence the present appeal.

(2.) IT is contended by Shri S.V. Jagesha, Consultant, who argued that the impugned order passed by the Collector was wrong in as much as comparing prices of Maharashtra Water Supply & Sewerage Board with the appellant's price without giving the same to the appellants. Moreover the price list given by the appellants have been approved and it clearly bears the necessary particulars regarding valuation.

(3.) WE have considered the rival submissions. As far as price list is concerned, we asked Mr. Jagesha, ld. Consultant to produce evidence of the price list as well as particulars submitted at the time of filing price list as to whether the particulars regarding the contract with its purchasers were given. Shri Jagesha was unable to produce such evidence. When the price lists was approved without any particulars we cannot accept the argument made by Shri Jagesha that full particulars had been given. Mr. Jagesha, Consultant further contended that goods were not sold out were only supplied in execution of works contract with its contractors. Argument of Shri Jagesha is that Rule 6 of the Valuation Rules cannot be applied to the facts of the case as the goods were not captively consumed in the manufacture of the goods. On this, we agree with him, that the goods were not sold. However, if Rule 6 does not apply the Collector has to follow only the best judgment assessment procedure in terms of Rule 7 of the Valuation Rules. Rule 7 says that the value of excisable goods cannot be determined at the foregoing rules the proper officer shall determine the value according to the best judgment and for this purpose he may have to recourse among other things to anyone or more of the methods provided for in the foregoing Rules. He has followed the comparable prices of the Maharashtra State Sewerage and Water Board. Shri Jagesha argues that the price list of Maharashtra Water Supply and Sewerage Board had not been given to him. But we cannot..............says the work sheet showing comparison of ex -factory price of three units of Kotecha with ex factory price of DSR Maharashtra Water and Sewerage Board is indicated. It is, therefore, clear that the argument of Shri Jagesh cannot be accepted. Moreover in the further letter submitted subsequently Shri Kotecha mentions about MWSSB. This shows that copy of the letter of Sewerage Board had been given. This ground also fails for Mr. Jagesha. In the impugned order, the Collector has held as follows: