2014 (5) TMI 1243 - AT - Central Excise

Method of valuation for determination of assessable value - assessable value should be determined under Rule 8 of the Central Excise Valuation Rules 2000 or not - HELD THAT - As held by the co-ordinate Bench at Ahmedabad in the case of CCE Vs. Rolaster Pvt. Ltd. 2011 (9) TMI 776 - CESTAT AHMEDABAD Rule 8 or Rule 10A of the Valuation Rules would not apply to the facts of the present case as the principal manufacturer has captively consumed the job-worked goods supplied. Since there is no sale the value of the goods has to be arrived at as per Ujagar Prints formula laid down by the Hon ble Apex Court on the basis of the cost of raw materials plus job charges including the profit of the job-worker. There is no dispute that the appellant has discharged the duty liability accordingly. Conclusion - When job-worked goods are captively consumed by the principal manufacturer Rule 8 or Rule 10A of the Valuation Rules does not apply and duty liability should be based on the cost of raw materials plus job charges including the job-worker s profit. The impugned order is not sustainable in law - Appeal allowed.

Summary

The appeal before the Appellate Tribunal, CESTAT Mumbai, challenged a duty demand confirmed against the appellant, M/s. Glamour Tin Industries Pvt. Ltd., by the Commissioner of Central Excise. The appellant, a job-worker for M/s. Raptakos Brett & Co. Ltd., had discharged excise duty liability based on the Ujagar Prints formula. The department contended that the assessable value should be determined under Rule 8 of the Central Excise Valuation Rules, 2000. The appellant argued that previous tribunal decisions supported their method of duty discharge, which was upheld by the Hon'ble Apex Court. It was established that when job-worked goods are captively consumed by the principal manufacturer, Rule 8 or Rule 10A of the Valuation Rules does not apply, and duty liability should be based on the cost of raw materials plus job charges, including the job-worker's profit. The Tribunal found in favor of the appellant, setting aside the impugned order and allowing the appeal.