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2018 (2) TMI 139 - AT - Central ExciseValuation - job-work - appellant submitted that Rule 10A(i) and (ii) are not applicable as the goods are not sold by the appellant but are used as packing materials by M/s. Marico Ltd. (principal) for packing of coconut oil - department was of the view that the price has to be determined upto 1.4.2007 applying Rule 8 and thereafter under Rule 10A(iii) r/w Rule 4 / Rule 8 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - whether the appellants have correctly arrived at the assessable value of the job worked goods? - Held that - The appellants have paid duty on the assessable valueworked out by taking into account the cost of materials plus conversion cost as laid down in the case of Ujagar Prints. The principal manufacturer (M/s.Marico) used the bottles in its factory for filling coconut oil - It needs to be mentioned that Rule 8 applies when goods are not sold. The goods (HDPE bottles) are sold by appellant to M/s. Marico. The appellant does not captively consume the goods nor does M/s.Marico consume it on behalf of appellant. Similar issue decided in the case of ADVANCE SURFACTANTS INDIA LTD. Versus COMMR. OF C. EX., MANGALORE 2011 (3) TMI 1380 - CESTAT, BANGALORE , where it was held that provisions of Rule 10A can be brought into play only when there is a situation where excisable goods are produced or manufactured by a job worker on behalf of a person and cleared to the buyer of the principal and/or cleared to a depot or a consignment agent. The intention of the Legislature was to capture the tax on the goods, on the value of the said goods when cleared to the ultimate consumers. Appeal allowed.
Issues Involved:
Valuation of job worked goods for excise duty calculation under Central Excise Valuation Rules, 2000. Detailed Analysis: Issue 1: Applicability of Valuation Rules The appellants were engaged in manufacturing Blow Moulded HDPE plastic bottles on a job work basis for M/s. Marico Ltd. and availed the SSI exemption under Notification No.8/2003. The department contended that the assessable value of the goods should be determined under Rule 8 and Rule 10A(iii) of the Central Excise Valuation Rules, 2000. The appellant argued that Rule 8 does not apply as the goods were sold to M/s. Marico and not consumed by them on behalf of the appellant. The appellant relied on Rule 10A(iii) and Rule 11 for valuation, citing the decision in Ujagar Prints Ltd. case and a Tribunal decision in a similar matter. The Tribunal analyzed the provisions of Rule 10A and Rule 8, concluding that Rule 10A(i) and (ii) did not apply in the present case, and Rule 10A(iii) mandated following the Valuation Rules sequentially. The Tribunal held that the impugned orders were not sustainable, setting them aside and allowing the appeals. Issue 2: Interpretation of Valuation Rules The Tribunal examined the provisions of Rule 10A, which apply when excisable goods are produced by a job worker on behalf of a principal manufacturer. It was noted that Rule 10A(i) and (ii) did not fit the scenario, leading to the application of Rule 10A(iii) for valuation. The Tribunal emphasized that Rule 10A(iii) mandates following the Valuation Rules sequentially, and in the absence of applicability of other rules, Rule 8 was considered by the Revenue. By referring to the provisions of Rule 8, the Tribunal determined that the ratio of a previous decision was applicable to the present case, leading to the conclusion that the impugned orders were unsustainable. Consequently, the appeals were allowed with any consequential relief. Conclusion The Tribunal's judgment delved into the intricacies of the Central Excise Valuation Rules, particularly Rule 10A and Rule 8, to ascertain the correct method for valuing job worked goods for excise duty calculation. By interpreting the rules and considering relevant precedents, the Tribunal determined that Rule 10A(iii) applied in the case at hand, necessitating a sequential application of the Valuation Rules. The decision ultimately favored the appellants, setting aside the impugned orders and allowing the appeals.
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