JUDGMENT
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.
5. Ld. DR Shri Soundararajan submits that all these pleas have been raised for the first time and these submissions were not before the Commissioner as per the impugned order and in terms of the procedure laid down in terms of Rule 6(b)(ii) of Central Excise (Valuation) Rules, 1975 that determination of assessable value on the cost of production or manufacture including the profit in the relevant period and the year is required to be taken and it has been rightly done so and correctly valuation adopted for issue of show cause notice. There was suppression and misdeclaration and hence larger period was invokable.
6. In counter, the Ld. Counsel submits that all the points raised by him had been stated so in reply to the show cause notice as well as in the personal hearing. However, the Commissioner has not noted their submissions in the impugned order.
7. On a careful consideration of the submissions, we notice that the arguments which have been urged before us now, have not been taken into consideration in the order impugned. The points raised by the appellants are that they have declared all the rates in the invoice and all the invoices were available with them and the department had checked these invoices. Their contention is that there is no suppression or mis-declaration. They have also submitted that it takes a long time till the tenders are floated and accepted and the PSCC Poles takes long time for procuring and to reach RG.1 stage. Therofre, the prices are adopted on the basis of rates of purchase of inputs. This aspect of the matter requires fresh consideration as there is no consideration of these submissions.
8. At this stage Ld. Counsel again reiterates that the Annexures to show cause notice shows valuation adopted by the department on the basis of prevailing market price and giving deductions to them. He submits that their contention with regard to the assessable value to be adopted has not been considered and hence the order is violative of principles of natural justice.
9. We agree with this prayer and notice that the above ground taken has not been considered and for that reason the impugned order is set aside and matter remanded to the Commissioner for fresh adjudication. The Ld. Commissioner shall take all the pleas of the appellants including the pleas that would be urged before him and redecide the case. The Ld. Commissioner shall also consider their pleas that there was no suppression in the matter. As the issue is old one, Ld/Commissioner shall readjudicate the matter within a reasonable period of 6 months from the date of receipt of this order. Ordered accordingly.
(Pronounced & Dictated in Open Court)