Universal Dyeing and Printing Vs. Commissioner of Central Excise - Court Judgment

Excerpt:
1. the application is for waiver of deposit of rs. 7.93 lakhs, demanded on the ground that the applicant had under-declared the cost of the gray fabric received by it for processing. the period involved is from january 1991 to march 1994.3. in the examples given in the asst. commissioner's order, he has proposed an increase of around 10% over the value declared by the applicant, for the reason that elements of profit, transport, shrinkage of fabric and octroi had not been included. the contention of the advocate for the applicant that from september 1991 onwards it added 10% to the cost declared by it, which is the total cost of raw materials and the processing charges, and that this addition will bring the cost to the value to be arrived at by accepting the proposal in the notice, is prima facie attractive. the asst. commissioner's attempt to get around this by saying that this does not include manufacturing profit is prima facie not acceptable; the tribunal has held that the cost of processing declared by a processor would normally include his profit cce v. super laminates 1996 (88) elt 255 prima facie therefore, the amount covered for the period from january 1991 to september 1991 is about 1.5 lakhs as mentioned in the notice, although we emphasize that the demand for the period will have to be finally determined after considering all the evidence. the contention is that no octroi was payable on gray fabric and that the cost of transportation has already been included. the first contention is not substantiated. the only evidence for the second contention is the letter of the supplier of the fabric which is itself unsupported by any evidence. taking these aspects into account, we ask the applicant to deposit rs. 1 lakh towards the duty within 2 months from today. thereupon we waive deposit of remaining amount and stay its recovery. compliance on 21.09.1999.

Judgment:
1. The application is for waiver of deposit of Rs. 7.93 lakhs, demanded on the ground that the applicant had under-declared the cost of the gray fabric received by it for processing. The period involved is from January 1991 to March 1994.

3. In the examples given in the Asst. Commissioner's order, he has proposed an increase of around 10% over the value declared by the applicant, for the reason that elements of profit, transport, shrinkage of fabric and octroi had not been included. The contention of the advocate for the applicant that from September 1991 onwards it added 10% to the cost declared by it, which is the total cost of raw materials and the processing charges, and that this addition will bring the cost to the value to be arrived at by accepting the proposal in the notice, is prima facie attractive. The Asst. Commissioner's attempt to get around this by saying that this does not include manufacturing profit is prima facie not acceptable; the Tribunal has held that the cost of processing declared by a processor would normally include his profit CCE v. Super Laminates 1996 (88) ELT 255 Prima facie therefore, the amount covered for the period from January 1991 to September 1991 is about 1.5 lakhs as mentioned in the notice, although we emphasize that the demand for the period will have to be finally determined after considering all the evidence. The contention is that no octroi was payable on gray fabric and that the cost of transportation has already been included. The first contention is not substantiated. The only evidence for the second contention is the letter of the supplier of the fabric which is itself unsupported by any evidence. Taking these aspects into account, we ask the applicant to deposit Rs. 1 lakh towards the duty within 2 months from today. Thereupon we waive deposit of remaining amount and stay its recovery. Compliance on 21.09.1999.