2005 (1) TMI 496 - AT - Central Excise

Summary

Issues:
Whether duty of excise is payable by job worker based on supplier's sale price.

Analysis:
The appeal filed by M/s. Kailash Auto Builders Ltd. questions the duty of excise payable by a job worker concerning the sale price of the raw material supplier. The appellants received duty paid chassis from M/s. TELCO Ltd. for building bodies on them and were paying concessional duty under a specific Notification. The Revenue demanded differential duty based on the sale price from M/s. TELCO Ltd.'s depot. The Advocate cited the Supreme Court's decision in Ujagar Prints case, emphasizing that the assessable value for job workers includes raw material cost, job work value, manufacturing profit, and expenses, not subsequent profits. Reference was made to a previous Tribunal order in a similar case.

The Tribunal considered both sides' arguments and acknowledged that the appellants were job workers fabricating bodies on chassis supplied by M/s. TELCO Ltd. Following the Supreme Court's principles in the Ujagar Prints case, the Tribunal ruled that duty cannot be demanded based on the raw material supplier's sale price. Referring to a previous Tribunal order involving the appellants, it was noted that independent job workers returning processed goods to their supplier should be valued based on comparable goods' price or cost of manufacture plus notional profit. Relying on the Ujagar Prints case and their previous decision, the Tribunal set aside the Revenue's order and allowed the appeal. The operative part of the Order was pronounced in open Court.