ORDER
G.R.Sharma
1. By this appeal, the Department confirmed three demands of duty and imposition of penalty of Rs. 14,89,61,104.00. Along with the appeals, the appellants have filed a stay petition for waiver of pre-deposit of duty demanded and penalty imposed.
2. Arguing the case for the applicants Shri V.Lakshmikumaran, Ld. Counsel submits that the applicants are engaged in the manufacture of Ethy1 Alcohol-Denatured. They have two units, one at Captainganj and the other at Barabanki. In their Captainganj unit, the appellants manufactured Denatured Spirit whereas at the Barabanki factory they manufactured chemicals. Since the applicants were using De-natured Spirit captively a dispute arose as to whether the value should be computed under Rule 6(b) (ii) as claimed by the manufacturers or under Rule 6(b) (i) as held by the Department. He submits that the appellants were getting molasses of manufacturers of de-natured spirit at controlled prices. He submits that the Department held that since comparable price was available for the goods, therefore, the question of computing assessable value under valuation Rule 6(b) (ii) did not arise. Ld. Counsel submits that the Departmental authorities took the highest price of another factory which presumbly was for a particular consignment on a particular date and thereby the Department computed the duty. He submits that no reasons have been adduced by the Department nor any document was supplied by them to show that this was the comparable price for some period. Ld. Counsel submits that Annexure to SCN shows that is the price taken from one consignment sold on one date by theother unt. He submits that when the assessee wanted to know the price charged by the other factory over a period of time, the same was not supplied. Ld. Counsel submits that this demand of Rs. 14,59,49,158.45 is for the period April’94 to Feb’99 when the SCN was issued on 26.3.99 and therefore, the demand for about 4 1/2 years is time barred. Ld. Counsel submits that in so far as the demand of Rs. 25,12,528/- and Rs. 4,99,417/- is concerned, the applicants have paid more duty to the authorities in-as-much as the assessable value at which the assessee/appellant paid duty was more than the value computed on the basis of the highest price charged by other unit. He submits that thus no demand for further differential duty arises in these tow cases.
3. Ld. Counsel also submitted that since valuation Rule 6(b)(i) was not applicable in their case in terms of Section 4(1)(b), therefore, the authorities should have computed the value under Valuation Rule 6(b) (ii). Ld. Counsel also submitted that while determing the value assistance may be taken from Customs Valuation Rules which showed that value should be computed in terms of Central Excise Valuation Rule 6(b) (ii).
Ld. Counsel also submitted that the entire exercise was revenue neutral in-as-much as had they paid higher duty as computed by the authorities, they would have taken credit of the higher amount and thus, the Department would have not got any extra additional duty.
4. Ld. Counsel also submitted that the applicant is having financial hardship and has incurred huge losses. He, therefore, prayed that since the applicant was not in a position to deposit any amount of duty and penalty in view of this financial crisis, pre-deposit may be waived.
Ld. Counsel also submitted that the applicants have a very good case both on merits as well as on limitation, therefore, pre-deposit my be waived.
5. Shri P.K.Jain, Ld.DR opposes the request and submits that for purpose of computing the assessable value, Rule 6(b) (i) is applicable to the appellants in as-much as value for comparable goods was available. He submits that since value of comparable goods was available, therefore, there was no question of going to Valuation Rule 6(b) (ii).
6. Ld. DR submits that in os fr as neutrality of Revenue is concerned, he submits that in the instant case if duty was paid by the Captainganj unit, credit would have been taken by the barabanki unit. He submits that Captainganj Unit and Barabanki Units are two seperate assessees. He submits that since they were two seperate assessees, therefore, the ration of the decision of Larger Bench of this Tribunal in the case of Jay Yuhshin Ltd. vs CCE, New Delhi reported in 2000(119)Elt.718 was not applicable to the facts of the present case.
Ld. DR also submitted that demand was not time barred in-as-much as the appellants were showing a very low price of de-natured spirit used captively and therefore, extension of the period of demand beyond six months was justified in-as-much as in the same field, higher price was available for comparable goods.
7. On financial hardship, Ld. DR submits that the applicants have substantial cash amount in the bank and could pay the duty and penalty. He, therefore, prays that the applicant may be directed to deposit the entire amount of duty and penalty.
8. We have heard the submissions of both sides. We note that in the instant case the dispute is whether the assessable value should be computed Valuation Rule 6(b) (i) or 6(b)(ii). The Departments contention is that when value of comparable goods is available, the question of going to Valuation Rule 6(b)(ii)does not arise. However, we find that from the records placed before us and the submissions made that the Departmental authorities took the highest value of comparable goods of a particular consignment, they did not take the average price. The contention of the applicant is that for so many reasons, the price was not of comparable goods and therefore, assessable value cannot be determined under Valuation Rule 6(b)(i). It was, therefore, submitted that the only Rule under which the assessable value could be determined, was Rule 6(b)(ii). Thus, we find that the issue is debatable. In the instant case we note that major part of the demandis beyond a period of six months.
9. On financial side, we find that the appellants have suffered a loss and were in some financial difficulty.
10. Having regard to the facts of the case and looing to the case in its entirity and the financial condition fo the company, we direct the appellant to deposit a sum of Rs.one crore towards duty within eight weeks from today. On deposti of this amount, doposit of the balance amout of duty and total amount of penalty shall be dispensed with and recovery therof shall remain stayed during the pendency of the appeal.
11. Failure to comply with the above directions, the stay shall get vacated and the appeal shall be dismissed without any further notice.
12. The matter should come up for reporting compliance on 23.8.2001.