9911796707
TMI Blog2000 (8) TMI 322X X X X Extracts X X X X X X X X Extracts X X X X ..... infant milk powder, pure ghee etc. The other appellant M/s. J. Ice Creams Pvt. Ltd. is a Company incorporated in 1980 under the Companies Act and engaged in the business of manufacturing ice creams. At the time M/s. J. Ice Creams started the manufacture of ice cream, that product was exempt from Central Excise Duty. In 1-6-1981 M/s. J. Ice Creams got into an agreement with M/s. Milk Food Ltd. for manufacture and supply of ice cream, according to the specifications of the buyer. The present proceedings started with the issue of show-cause notice dated 9-8-1995. This notice proposed to demand duty from both the appellants, treating both the units as related to each other and also alleging that M/s. J. Ice Creams was a dummy unit created by M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re in existence and in production even before the agreement between both the parties. The agreement is on principal to principal basis and therefore, there is no justification for treating one as the agent of the other. He also submitted that, in any event, the valuation adopted by the Commissioner is completely erroneous. Rule 6 (b)(i) of the Central Excise Rules related to valuation of goods which are captively consumed by a manufacturer. In the present case goods were not being captively consumed but were being transferred to the company who had entrusted their production on job work basis. The ld. Counsel submitted that the law relating to valuation of goods produced on job work basis remains laid down in the order of the Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the materials supplied to the job worker and the cost of production and manufacturing profit of the job worker. The sales cost and sales profit of the buyer who got the goods produced on job work basis are not to be included in the assessable value. This is the principle of valuation reiterated by the Supreme Court while allowing the appeal of Pawan Biscuit Company. The impugned order is, therefore, clearly erroneous and is required to be set aside. The method of valuation adopted in the adjudication order also has no basis. Rule 6(b)(i) of valuation rules relates only to valuation of goods, produced and captively consumed. According to the order itself, there is no captive consumption of the goods. Therefore, this Rule was clearly not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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