Customs, Excise and Gold Tribunal - Calcutta
M/S. Indian Rayon And Indus. Ltd. vs Cce, Calcutta - Iv on 16 May, 2001
ORDER
Smt. Archana Wadhwa.
1. The prayer in the application for dispensing with the condition of predeposit of duty amount of Rs.46,90,896.00 and penalty amount of Rs. 25 lakhs.
2. The appellant is a processor of man -made fabric and is undertaking the said activity on job work basis. He is receiving the unprocessed fabrics from various parties and after getting the same processed returning to the said customers. The duty during the material time was being paid by them by adopting the sale price of their suppliers, duly declared by them by filing a declaration. The Revenue's contention is that based upon the costing structure, the assessable value of the processed fabrics would come on the higher side inasmuch as the shrinkage loss which is to be tune of approx. 4% would get added to the assessable value of the finally processed fabric. On this basis the demand has been confirmed against them and penalty.
3. Shri S.K. Bagaria, Id. adv. appearing for the appellant has drawn our attention to the annexure to the show cause notice. He submits that tow periods are involved int he present appeal. During the first period the rate of duty was 50 paisa per square meter +5% ad veloram and during the second period the rate of duty was 10% ad veloram. He submits that the entire dispute raised by the Revenue is as regards the valuation of the processed fabrics. which will not have any baring on the specific rate of duty which is 50 paisa per square meter. As such even if the Revenue's contention is acceptable the differential amount of duty in terms of rate of duty of 5% (SIC) for the first period would come to around Rs.3 lakhs. As such, though denying, he submits that the duty difference in any case cannot exceed Rs.7 lakhs.
4. Arguing on the merits of the case he submits that the duty was being paid by them on the declarations made by their supplies. The said declarations as regards the selling price of their supplier have not been challenged by the Revenue authorities. As per the Hon'ble Supreme Court's decision in the case of Ujagar Prints he department can go to the costing factor only when the selling price of the supplier is not available. In this view he prays for allowing the stay petitions unconditionally.
5. Countering the arguments Shri V.K. Chaturvedi, Id. SDR submits that the shrinkage loss has to be adjusted and no fault can be found with the order passed by the Commissioner on this issue. As such he makes a prayer for rejecting the stay petition.
6. After hearing both the sides, we agree with the first contention of the Id. adv. that the specific rate of duty of 50 paisa per square metre paid by the appellant on their final product will not have any baring on the assessable value of the processed fabric inasmuch as the duty was specific per square meter. As such taking this contention to be prima facie in favour of the appellants and the other contention being contentious, we direct the applicant to deposit an amount of Rs.5 lakhs within a period of four weeks today. Subject to deposit of above amount, the predeposit balance amount of duty and penalty shall stand waived and its recovery stayed during the pendency of the appeal. Matter to come up for compliance on 19.6.2001. Subject to ascertaining compliance on the said date main appeal would also be heard on the said date.
7. Dictated in the court.