Document Fragment View

Matching Fragments

S.L. Peeran

1. This appeal of A.P.S.E.B. (Poles Unit) arises from OIO No. 3/97 dated 29.4.97 confirming short levy of Rs. 1,34,714/- by invoking larger period and the demand pertains to the period 1.6.91 to 31.3.94 confirmed under Rule 9(2) read with proviso to Section 11A of the Act. There is penalty of Rs. 10,000/-.

2. Appellants were issued with Show Cause Notice alleging that they have wrongly submitted the details in the price list for approval and did not furnish the particulars of cost of production based on the actual prices of raw materials as obtained during that year. Instead, the price of the raw materials related to previous years (mostly price as existed 2 1/2 years back) was taken into account to determine the cost of product manufactured in subsequent years. The cost of production worked out in aforesaid manner, and shown in price lists did not represent the correct assessable value of the product. Therefore, the department issued show cause notice invoking suppression of facts, mis-declaration and to enhance the goods manufactured and cleared.

3. On the basis of these allegations, the demands have been confirmed for larger period and penalty imposed.

4. Ld. Counsel Shri G. Raghunatha Rao points out to the grounds now taken up by the appellants. It is contended that appellant is the State Electricity Board run by the Govt. of Andhra Pradesh. The procedure followed for procurement of raw material is that the same is also procured after floating tenders. The inputs are stored and thereafter as per requirements, the tenders are floated for manufacture of PSCC poles. After acceptance of tenders, the raw materials from the godown are released on the basis of first storage and first release for manufacture. The PSCC poles takes a longer time for procuring and to reach the RG.1 stage after lapse of time. Therefore, the valuation has to be adopted at the time when the goods are ready for removal. On that day, the value of raw materials were as procured two and a half years ago. The process of calling tenders, and procurement takes a long time. The raw materials had already been procured and kept in godown. Therefore, they have not suppressed any value nor they were required to take the value of invoices and cost at the prevailing rate of removal of final products. That is why, he submits that there was no cause of action for issue of show cause notice and demands are time barred as there is no suppression in the matter. They maintained all the registers and invoices for procurement of the raw material. The calculation arrived at is as per law.