2003 (10) TMI 647 - AT - Central Excise

Summary

Issues:
- Appeal against order in appeal allowing revenue's appeal
- Allegation of under valuation and flow back of money
- Application of Central Excise Act 1944
- Interpretation of Supreme Court judgments
- Job work pricing and profit determination

Analysis:
1. The appeal was filed against the order in appeal that allowed the revenue's appeal, setting aside the original order that dropped proceedings against the appellants. The appellant argued that they processed raw materials into plasticisers for M/s. Thirumalai Chemicals Ltd. and cleared them at the sale price of M/s. TCL. They contended that selling at a price lower than cost due to adverse conditions is permissible under the Central Excise Act 1944. Reference was made to the Apex Court judgment in CCE v. Gurunanak Refrigeration Corporation, emphasizing the ascertainability of normal price and absence of money flow back.

2. The Departmental Representative relied on the Supreme Court judgment in Ujagar Prints v. Union of India, asserting that job work pricing should include manufacturing cost and job worker's profit. A distinction was drawn from the Guru Nanak Refrigeration Corporation case where the sale was by the manufacturer, not the job worker. The Assistant Commissioner's findings noted that the job worker adopted the main manufacturer's prices, authorized to manufacture on their behalf, and observed all Central Excise formalities for M/s. TCL.

3. The Tribunal considered the submissions and found that the job workers adopted the main manufacturer's prices, which was acceptable during a temporary phase as per the Apex Court's decision in CCE v. Guru Nanak Refrigeration Corporation. The Tribunal disagreed with the Commissioner's reliance on the Ujagar Prints judgment and concluded that the Supreme Court's decision in Guru Nanak Refrigeration Corporation was relevant. The appeal was allowed, setting aside the impugned order based on the Apex Court's decision in CCE v. Guru Nanak Refrigeration Corporation.

This detailed analysis highlights the key arguments, legal interpretations, and the Tribunal's reasoning leading to the decision to allow the appeal and set aside the order in question.