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2024 (2) TMI 76 - AT - Central ExciseValuation - Whether the appellant M/s. Tescom is a job worker of M/s. Roca or whether the transaction is on principal to principal basis? - Department entertained the view that the goods ought to have been valued as per Rule 10A of the Central Excise Valuation (Determination of Price of the Excisable Goods) Rules, 2000, under Section 4(1)(b) of the Central Excise Act, 1944 - HELD THAT - The Tribunal in the case of M/S. INOVA INDIA, M/S. ROCA BATHROOM PRODUCTS PRIVATE LIMITED, (FORMERLY M/S. PARRYWARE ROCA (P) LTD. ) VERSUS THE COMMISSIONER OF CENTRAL EXCISE, CHENNAI-II COMMISSIONERATE 2020 (3) TMI 308 - CESTAT CHENNAI had analysed the very same issue and set aside the duty demand, interest and penalties imposed. The facts and issues being identical, by judicial discipline, the decision rendered in the appellant s own case is followed and the duty demand or penalties imposed on M/s. Texcom, cannot be sustained and require to be set aside. So also, the penalties imposed on M/s. Roca cannot be sustained and requires to be set aside. The impugned orders are set aside. The appeals are allowed.
Issues Involved:
1. Whether the appellant M/s. Tescom is a job worker of M/s. Roca or if the transaction between them is on a principal-to-principal basis. 2. The correctness of the valuation adopted for payment of duty by the appellant. 3. The legitimacy of penalties imposed on M/s. Roca Bathroom Products Pvt. Ltd. Summary: Issue 1: Principal-to-Principal Basis vs. Job Worker The primary issue was whether M/s. Tescom Electronics Pvt. Ltd. was acting as a job worker for M/s. Roca Bathroom Products Pvt. Ltd. or if their transactions were on a principal-to-principal basis. The Department argued that M/s. Tescom was a job worker because M/s. Roca controlled the manufacturing activities and fixed the selling price of the goods. However, the Tribunal found that the transactions were indeed on a principal-to-principal basis, as stipulated in the agreement between the parties. The agreement explicitly stated that M/s. Tescom was responsible for the manufacture, sale, and supply of the products and that the relationship did not constitute an agency. Issue 2: Valuation for Payment of Duty The Department contended that the value adopted for payment of duty by M/s. Tescom was not the sole consideration for sale, suggesting that the goods should have been valued as per Rule 10A of the Central Excise Valuation Rules, 2000. The Tribunal, however, noted that M/s. Tescom procured and owned the materials used in manufacturing, including the urinal casings purchased from M/s. Roca. Since the materials were not supplied free of cost and the transactions were on a sale basis, the Tribunal held that the valuation adopted by M/s. Tescom was correct and in line with the law. Issue 3: Penalties on M/s. Roca Bathroom Products Pvt. Ltd. The penalties imposed on M/s. Roca were based on the assumption that they had supplied materials free of cost to M/s. Tescom, thus making M/s. Tescom a job worker. The Tribunal found this assumption incorrect, as M/s. Roca had sold the urinal casings to M/s. Tescom, who then used them in manufacturing. The Tribunal cited previous decisions, including the case of M/s. Inova India, where similar facts led to the conclusion that the relationship was on a principal-to-principal basis, not a job worker arrangement. Consequently, the penalties on M/s. Roca could not be sustained. Conclusion: The Tribunal set aside the duty demand, interest, and penalties imposed on both M/s. Tescom and M/s. Roca, affirming that the transactions were on a principal-to-principal basis and the valuation adopted for duty payment was correct. The appeals were allowed with consequential reliefs as per the law.
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