2019 (1) TMI 1096 – CESTAT CHENNAI – TMI – Valuation – Discrepancies in the figures shown in the Profit & Loss account and ERI returns – the total value of both the traded goods and the manufactured goods as shown in the worksheet was found to be less than the value as shown in the profit and loss accounts for each of the three financial years – demand of differential duty – Held that:- Commissioner has said that though the proprietor of the assessee has given statement that they are doing some modification on the goods, there is nothing to show that a new product emerges from such modification. The goods received and the goods sold are one and the same and there is no change in CETH or description of the goods. The Commissioner has therefore categorically held that the activity if any of modifying the goods does not amount to manufacture.
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It is for the department to show as to what are the inputs used for doing such modification and what is the activity actually involved for do
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37/- raised in the show cause notice and confirmed the demand of only ₹ 23,14,649/- along with interest and imposed equal penalty. 2. On behalf of the appellant, ld. AR Shri S. Govindarajan supported the grounds of appeal. He submitted that the show cause notice was issued after noting discrepancies in the figures shown in the Profit & Loss account and ERI returns. The respondent was engaged in trading of goods also. When they were asked to produce evidence, the respondent produced a worksheet showing the break-up of the invoices in respect of traded goods and manufactured goods for the years 2007 – 08, 2008 – 09 and 2009 – 10. The respondents had purchased the traded goods from M/s. Sam Turbo Industries Ltd. Coimbatore and sold to various Thermal Power Stations. However, the total value of both the traded goods and the manufactured goods as shown in the worksheet was found to be less than the value as shown in the profit and loss accounts for each of the three financial year
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at the activity amounts to manufacture. When there is increase in the value, it is strong indication that the respondents have undertaken process of manufacture on the goods purchased. Thus, the demand of duty on the amount corresponding to the enhanced value shown in the sales invoice as raised in the show cause notice ought to have been confirmed. 3. The ld. counsel Shri M.N. Bharathi submitted that the grounds of appeal stated is entirely different from that of the argument put forward by the ld. AR. In the grounds of appeal, the only ground stated is that the Commissioner has not given any finding for setting aside the demand on the ground of limitation. In the impugned order, the Commissioner has not dropped the demand of ₹ 34,94,737/- on the ground of limitation. In fact, in paragraphs 15 and16 of the impugned order, the Commissioner has categorically held that although the respondents are doing some modifications on the goods received into the factory, there is no new prod
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tion or with regard to confirmation of interest and demand. 6. In the impugned order, in paragraphs 13 to 16, the Commissioner has discussed the issue of the difference in the figures reflected in the returns filed by the respondent and the financial statement. The demand in respect of ₹ 34,94,737/- is made only in respect of such amount reflected in the sales invoices wherein the goods have been sold at a higher price by the respondent. In para 15, the Commissioner has said that though the proprietor of the assessee has given statement that they are doing some modification on the goods, there is nothing to show that a new product emerges from such modification. The goods received and the goods sold are one and the same and there is no change in CETH or description of the goods. The Commissioner has therefore categorically held that the activity if any of modifying the goods does not amount to manufacture. In that case, it is for the department to show as to what are the inputs u
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