2015 (4) TMI 926 - AT - Central Excise

Valuation of goods - manufacture of acetylene gas - appellant also manufacture the same product on job-work goods, arrived at the assessable value on the basis of sale price provided by their principal, M/s. BOC Ltd. and discharged the excise liability on the said value - Revenue contends that sale price of the goods manufactured and sold by the appellant to the independent buyer (other than job worker) should be applied for the purpose of valuation of job-work goods also - Held that - The appellant is manufacturing acetylene gas on job-work basis where the principal M/s. BOC Ltd. is supplying the inputs. The appellant is paying excise duty on the sale-price at which the goods is sold by their principal, M/s. BOC Ltd. As regards the valuation of job-work goods, it is settled by the hon ble Supreme Court in the case of Ujagar Prints (1988 (11) TMI 106 - SUPREME COURT OF INDIA) that the valuation of job-work goods should be arrived at by taking the cost of raw material plus job-charges including profit of the job-worker. In the present case, the appellant is applying the sale value of the principal and it is not under dispute that the said value is lower than the value computed in terms of hon ble apex Court judgment in Ujagar Prints (1988 (11) TMI 106 - SUPREME COURT OF INDIA). So long as this factual position is not in dispute, we find that adoption of the value by the appellant is absolutely legal and correct. - Decided in favour of assessee.

Summary

Issues: Valuation of job-work goods based on sale price, application of different prices for different class of buyers, comparison of goods sold on job-work basis and to independent buyers.

Valuation of Job-work Goods: The appeal challenged an order confirming a duty demand on acetylene gas manufacture. The appellant valued job-work goods using the sale price of the principal, M/s. BOC Ltd., which was higher than the value per Ujagar Prints case. The appellant argued this valuation was correct, citing the Ujagar Prints judgment. The Tribunal agreed, stating the appellant's valuation was legal per Ujagar Prints, rejecting Revenue's argument to use comparable goods' value.

Application of Different Prices: The Revenue contended that goods sold to independent buyers should determine job-work goods' value. They cited judgments like Orissa Polyfibres Ltd. and Fiat India Pvt. Ltd. The Tribunal disagreed, emphasizing the legality of varying prices for different buyers, as upheld in the Surindra Steel Rolling Mills case.

Comparison of Goods: The Tribunal analyzed the Surindra Steel Rolling Mills case, where job workers paid duty based on the principal's sale price. The judgment clarified that assessable value should include all costs and profits up to the sale of goods. The Tribunal upheld this judgment, emphasizing that the appellant's valuation was correct and legal, setting aside the impugned order and allowing the appeal.

This detailed analysis of the legal judgment highlights the key issues of valuation of job-work goods, application of different prices for different buyers, and the comparison of goods sold on job-work basis and to independent buyers, providing a thorough understanding of the Tribunal's decision.