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2005 (10) TMI 366 - AT - Central Excise
Issues: Valuation of goods manufactured on job work basis under Central Excise Act, 1944.
The judgment by the Appellate Tribunal CESTAT, Mumbai, involved the issue of valuation of goods manufactured on job work basis under the Central Excise Act, 1944. The Revenue appealed against the decision of the Commissioner (Appeals) who set aside the duty demands made by the Dy. Commissioner. The Dy. Commissioner had determined the value of 'Pure Acids' cleared by the respondents by adding a profit margin of 15% as per the provisions of Section 4 of the Central Excise Act, 1944 read with Rules 8 & 11 of Central Excise Valuation Rules, 2000. The Tribunal noted that the valuation in this case should be in accordance with the settled law on valuation of goods manufactured on job work basis, as established by the Constitution Bench of the Supreme Court in the case of Ujagar Prints. The Commissioner (Appeals) had relied on a CBEC Circular which stated that the new Valuation Rules essentially maintained the scheme and features of the Valuation Rules 1975. The Tribunal found no reason to deviate from this position and emphasized that valuation under the Central Excise Valuation Rules 2000 must adhere to the rules laid down by the Supreme Court in the Ujagar Prints case, which remained the law even after 1-7-2000. The Tribunal further referenced a previous decision in M/s. Tara Industries Ltd v. C.C.EX. and a Circular issued by the Boards, both supporting the application of the valuation rules post the introduction of the Central Excise Valuation Rules 2000. Consequently, the Tribunal concluded that there was no justification to include a profit margin of 15% as requested by the Revenue in their appeal. In light of the above analysis, the Tribunal determined that the appeal filed by the Revenue lacked merit and grounds, and therefore, it was rejected. The judgment highlights the importance of adhering to the established valuation rules for goods manufactured on job work basis under the Central Excise Act, 1944, as per the precedents set by the Supreme Court and relevant circulars.
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