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2018 (12) TMI 1033 - AT - Central ExciseValuation - Job work - repacking of Cement into retail packs of different sizes - sale of goods on behalf of principal - Rule 8 of Central Excise Valuation Rules - inclusion of profit margin of 15% in assessable value - time limitation - Held that - RBIL is discharging the duty liability on such bulk Ultramarine Robin Blue by considering the cost of production and 15% mark up as provided under Rule 8 of Central Excise Valuation Rules. It is not in dispute that RBIL is correctly discharging the duty liability as the bulk Ultramarine Robin Blue cleared is repacked and resold as Ultramarine Blue on behalf of RBIL. Provisions of Rule 8 would apply to RBIL and they accordingly discharged the duty liability. The formula which is sought to be applied for discharge of duty liability by the appellant is cost of raw material plus Job worker s charges and on this amount, the Central Excise Duty needs to be discharged. In the case in hand, appellant undisputedly is a job worker and includes the cost of job charges but while arriving at the raw material cost has considered only cost of production shown by RBIL in their invoice when they cleared the Ultramarine Robin Blue in bulk - In the case in hand, there being no dispute as to the fact that appellant is job worker of RBIL, has to consider the cost/ value of the raw materials. In the case in hand, raw material for the appellant is Ultramarine Robin Blue in bulk pack on which the duty liability is discharged by taking value of the cost of production plus 15% mark up. Appellant should have considered the value of bulk Ultramarine Robin Blue on which the principal has discharged the duty liability. Time Limitation - Held that - Appellant had not brought this aspect of the valuation to the notice of the department and did not file any price declarations as was required during the relevant period. The first price declaration which was filed by him was in 2001 - appellant has no made out any case in his favour on the question of limitation also. Appeal dismissed - decided against appellant.
Issues: Valuation of goods for consumption
The judgment in this case revolves around the valuation of cement used for consumption. The appellant was repacking Ultramarine Robin Blue received in bulk from a manufacturer and discharging Central Excise Duty on the repacked goods. The issue arose when the valuation of the repacked goods was not done in accordance with Central Excise Valuation Rules, as the appellant did not include the required 15% mark up in the declared price. The department issued show cause notices demanding differential duty, interest, and penalties for the period in question. The adjudicating authority initially dropped the proceedings, but the Tribunal remanded the matter back for valuation of the goods. The adjudicating authority, following due process of law, confirmed the demands, interest, and penalties. The appellant contended that they discharged duty liability based on the cost construction method as per the Supreme Court's ruling in Ujagar Prints, arguing that the cost of production should only include the actual cost, excluding the 15% mark up. They also claimed that the demands should be set aside due to a genuine belief regarding the interpretation of Rule 8 during the relevant period. The departmental representative argued that the value should be determined by the principal manufacturer of Ultramarine Robin Blue and that the appellant's claims of misinterpretation were invalid. They further stated that the extended period of limitation for the demands was justified as the department was made aware of the discrepancies in the appellant's declarations. The Tribunal found that the appellant had no merit on both the valuation issue and the limitation aspect. Firstly, the appellant, as a job worker, failed to consider the 15% mark up added by the principal manufacturer when determining the cost of raw materials, contrary to the law established in Ujagar Prints. Secondly, the Tribunal held that the appellant did not disclose the correct valuation to the department and failed to comply with the required declarations during the relevant period, justifying the demands even within the extended period of limitation. In conclusion, the Tribunal upheld the impugned order, rejecting the appeal filed by the appellant. The judgment was pronounced on 18.12.2018.
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