9911796707
TMI Blog1998 (4) TMI 181X X X X Extracts X X X X X X X X Extracts X X X X ..... mounting to Rs. 12,46,951.85 should not be recovered from them and why penalty should not be imposed and why the land, building, plant, machinery, materials, etc. should not be confiscated under Rule 173Q on the ground of wilful suppression of facts, clearance of goods without filing proper and correct price lists, clearance of the goods without determining the appropriate Central Excise duty, clearance of goods without payment of Central Excise duty, by debiting the PLA account and other grounds. After considering the appellants reply and after hearing them, the Collector passed the impugned order. 3. Shri B.B. Gujral, learned Advocate along with Shri R.L. Bahl, learned Consultant appeared for the appellants. Shri K. Srivastava, learned SDR appeared for the Revenue. 4. The learned Advocate submitted that the appellants are engaged in three types of manufacturing activities, namely (a) as job workers for their customers for the manufacture of tankers, (b) fabrication of tankers on the basis of contract for various suppliers for which no material was supplied by the customers and (c) as original manufacturers of LPG tankers. The present dispute related to 218 LPG tankers fabric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified by the buyers Chartered Accountants were also submitted by appellants to the Department which were duly approved by the Asstt. Collector and no objection had been taken by the Department for not adding notional margin for charging Central Excise duty on the notional profits of the appellants customers under Valuation Rules, 1975. The ld. Counsel further contended that the matter was adjudicated later on by the Asstt. Collector ex parte by order passed on 19-12-1984 and the appellants had thereafter agreed to pay Central Excise duty on 10% notional margin of profit of the appellants customers and the same were paid with retrospective effect from 1983. In regard to 159 tankers supplied to M/s. Kwality Fabricators during the period 1983 to 1985, the appellants contended that the same were fabricated on job work basis and for the said transactions, the price list showing the cost of raw materials, fabrication charges and 10% notional profit pursuant to the order of the Assistant Collector was approved by the Assistant Collector. The duty was also paid on the basis of assessable value as approved in the price list. It was contended that the appellants were not concerned with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claration of price of 59 tankers, the appellants case is that they had tendered sufficient evidence before the adjudicating authority to prove that out of gross value of the cheques received from the buyers of tankers, the appellants returned to their buyers, the cost of raw materials and had in the end, refunded even the amount remaining in balance after adjusting their labour charges, the cost of other raw materials supplied by them and 10% notional margin of profit by crossed orders/cheques. They had also by their letter dated 17-2-1989 addressed to the adjudicating authority submitted the complete list of 59 tankers sold to different parties annexing therewith invoices of various customers and also proof of refund of balance money after deducting labour charges, cost of certain small items and 10% notional margin of profit from the quotation value. They contended that it was open to the adjudicating authority to verify the evidence before arriving at any conclusion. They also submitted that there was a slight mistake in accounting the number of tankers in the show cause notice and in the adjudication order inasmuch as the total number of tankers cleared by the appellants were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... between the appellants and M/s. Kwality Fabricators inasmuch as the entire raw material charges were covered by advances from the banks and there was no actual supply of raw materials by M/s. Kwality Fabricators to the appellants. While the appellants showed a certain price in their price lists on the basis of costing including job work charges and 10% as notional margin M/s. Kwality Fabricators had sold the tankers at a price higher than the price declared by the appellants in their price list. In the statement given by Shri S.K. Verma, Proprietor of M/s. Kwality Fabricators, he had stated that the selling price of the appellants product to customers was in their price list. During the submissions before us, however, the learned Advocate for the appellants had submitted that the fact should not be lost sight of that the appellants and M/s. Kwality Fabricators were two different and independent legal entities. The appellants were engaged in the fabrication of tankers on job work basis. They had fabricated a number of tankers on job work basis for M/s. Kwality Fabricators on raw material supplied by M/s. Kwality Fabricators. They (M/s. Super Steels Corporation) had also filed the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat is being executed was merely as hired labour. [CCE v. Print Origin, 1997 (90) E.L.T. 180 (T)]. In Ujagar Prints and Others v. Union of India [1988 (38) E.L.T. 535 (S.C.)] the Apex Court had held that in the case of processors of grey fabrics (job workers), they become liable to pay excise duty not because they were owners of the goods but because they cause the `manufacture of goods. In its further clarificatory order reported in 1989 (39) E.L.T. 493 (S.C.), the Court had held that the assessable value of goods produced on job work basis would include the cost of material, processing charges and profit of processor but not Trader s profit since the said charges would be post-manufacturing profit. Further, where the trader gives to the processor a declaration about the price at which he would be selling the processed goods in the market, such declared price would be considered the assessable value provided it included only the price at which the processed goods would leave the processor s factory, plus the processor s profit. In CCE v. Pharmasia Ltd. [1996 (63) ECR 380] the Tribunal had, following the said Apex Court rulings held that the assessable value of the goods manufactu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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