AGENDA FOR MMCM TO BE HELD ON 27.04.2012 ADVISORY PARA 1. Audit Group (IAP) No 2. Unit SL No 3. Name of the Unit : II : : M/s.

Kadevi Engineering ltd, Sy no.146 & 147Anki Reddy Palli Village, Kesara Mandal, R.R Dist. Pin 501 301. M S Angles, Chennels, Tower Parts, Hardware( Nuts&Bolts) & DG Sets : Ghatkesar Range /G Division : : 08/2010 to 12/2011. : 14.02.2012 to 16.02.2012 : : II. Advisory Note:

3. (A)

Products Manufactured

4. Range/Division 5. Para Code No 6. Period of audit 7. Date of Audit 8.Para Sl No. 9. Gist of audit objection

Assesses have cleared tower parts from M/s. Kadevi Industries ltd, Sy no.146 & 147Anki Reddy Palli Village, Kesara Mandal, R.R Dist unit to M/s. Kadevi Industries ltd, E.C, Kushaiguda unit on stock transfer basis and valuation adopted as per invoice is 110% of the cost. However the CAS-4 certificate was not produced even after may be advised to ensure that the issuance of spot memo dt16.02.2012. JDO intimated to this office. 10. Revenue involved 11. Asseesees stand if any 12. JAC/JRO compliance, if any : 13. Decision taken in MMCM : : :

assesses adopted the valuation as per the CAS 4 certificate and the same may be

AGENDA FOR MMCM TO BE HELD ON 27.04.2012 ADVISORY PARAS 1 . Audit Group (IAP) No : II 2. Unit SL No 3. Name of the Unit 3. (A) Products Manufactured : : M/s. Nile Ltd, I D A , Nacharam, Near Tisco, Hyderabad. Pin 500 076 Glass lined Equipment : Nacharam II Range / Division H : : 01/2010 to 11/2011 : 29.02.2012 to 02.03.2012 : : ADVISORY NOTE

4. Range/Division 5. Para Code No 6. Period of audit 7. Date of Audit 8.Para Sl No. 9. Gist of audit objection

It is observed by the Audit that assesses have been replacing the defective parts of the already cleared final products to their customers at free of cost within the warranty period after payment of duty under Central Excise Invoice. It is understood that assesses have been adopting approximate value for the said replacement parts. It is also observed that no price break up is available in the original Invoice and the purchase Order to determine the actual price of the free replacement parts. In view of the above, it appears that the value adopted for free replacement parts is not correct and there is a possibility of short payment of duty due to under valuation. As there is no sale involved in the free replacement of defective parts within the warranty period, the assessable value may be arrived at by cost construction method and duty shall be discharged on such arrived cost after adding notional profit on the strength of CAS-4 certificate issued by the cost Accountant Hence, assesses were advised to produce the details of all such clearances during the Audit period and CAS-4 certificates for all such clearances and pay any differential duty arises immediately vide Spot Memo issued on 2.03.2012. Assesses have informed the Audit that it would take some time to obtain the CAS-4 certificate from a Cost Accountant and would submit the same as soon as they obtain it. Similarly assesses are doing repairs of already cleared reactors within warranty period free of cost which they are clearing on Delivery Challan. At the time of Audit they said that only minor repairs were done at free of cost, but, could not produce any details of repairs carried on. In view of the above the jurisdictional Ac may follow up with the assesses and take necessary action in this regard.

10. Revenue involved 11. Asseesees stand if any 12. JAC/JRO compliance, if any :

: :

13. Decision taken in MMCM : AGENDA FOR MMCM TO BE HELD ON 27.04.2012 ADVISORY PARAS 1. Audit Group (IAP) No 2. Unit SL No : II : : M/s. Sizoll Chemicals Pvt Ltd, Plot no.112, Phase - II, I D A, Cherlapally, R.R Dist.. Paper Chemicals : Cherlapally Range / Division I : OR 13 : 01/2007 to 12/2011 : 28.02.12, 06.03.12 & 07.03.12 : : Advisory Note :

3. Name of the Unit

3. (A)

Products Manufactured

4. Range/Division 5. Para Code No 6. Period of audit 7. Date of Audit 8.Para Sl No. 9. Gist of audit objection

The assesses are not maintaining the R.G 1 register. The same may be asked to maintain the Register under intimation to this office.

10. Revenue involved 11. Asseesees stand if any 12. JAC/JRO compliance, if any : 13. Decision taken in MMCM

: :