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TMI Blog1999 (9) TMI 877X X X X Extracts X X X X X X X X Extracts X X X X ..... ting and printing paper in the form of sheets was cleared from the factory. The appellants had claimed a higher discount of Rs. 900 PMT when the reels were removed to the depot or to their job workers for conversion of the reels into the sheets. Eleven show cause notices were issued to the appellants alleging under valuation with regard to the removal of reels to the job workers for conversion into sheets and sale to the customers in the form of sheets. It was alleged in the show cause notices that during the period from April, 1994 to February, 1995 the assessee evaded Central Excise duty of Rs. 1,14,746/- and cess of Rs. 752/-. The Assistant Commissioner, Central Excise, Rampur who adjudicated the matter observed that when paper reels were sent to job workers for conversion into sheets it did not amount to sale and that the goods were actually sold to the customers in the form of sheets only. The discount of Rs. 500/- PMT in respect of the sale of sheets alone was admissible and the additional discount of. Rs. 400/- (Rs. 900/- - Rs. 500/-) PMT was not admissible when the goods were actually sold in the form of sheets through the job workers/assessee's own depot. He confirmed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pacity of the appellants for converting reels into sheets in their own factory was limited. They could not convert reels into sheets themselves in their own factory premises. In such circumstances the reels were sent to the job workers for conversion into sheets and then the writing and printing paper in the form of sheets was sold by the appellants to their customers from the premises of the job workers or through their own godown. In synopsis the appellants had stated as under :- "The capacity of the appellants to manufacture sheets in their factory is limited. Whenever there is excess demand for sheets, the appellants clear the reels to a job worker who converts them into sheets and from where it is sold to the customers". 5. It is thus clear that what was sold in this case was not the reels but the sheets. As the factory gate price was available for the sheets, the sheets even when sold from the premises of job worker/through the assessee's own godown were required to be assessed on the basis of such factory gate price of the sheets, refer Indian Oxygen Limited v. CCE - 1988 (36) E.L.T. 723 (S.C.). 6. The job worker was not an independent dealer purchasing and sell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observed that the job worker could not be forced to avail of the benefit of the notification and that the choice was with him in regard to the availment of the benefit of the notification. Reference had also been made to the Court-Room Highlights appearing at page A145 in the 1997 (94) E.L.T. wherein the Supreme Court had dismissed the civil appeal filed by the Collector of Central Excise, Ahmedabad against the Tribunal order in the case of M/s. Bright Steel Mac Fabrics v. CCE reported in 1994 (69) E.L.T. 276 (T). The Tribunal had held that the job worker could avail of the benefit of small scale exemption notification and that such job worker could not be compelled to follow the option under Notification No. 214/86-C.E. We do not consider that these decisions are applicable to the facts of the case. 10. In the facts and circumstances of the case we consider that the view taken by the learned Commissioner, Central Excise (Appeals) was correct and does not call for any interference, we do not find any merit in this appeal and the same is rejected. Ordered accordingly. Sd/-(Lajja Ram)Member (T) 11. [Order per : G.A. Brahma Deva, Member (J)]. - I have gone through the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... els which is cleared only for conversion into sheets. Hence, the appellants can not be allowed to retain differential amount of Rs. 400/- per M.T. without payment of excise duty". 14. The Commissioner (Appeals), as can be seen from the order, has posed a question that the crux of the problem lies in to decide whether price is to be determined at factory gate or at the place where they are actually sold. It is settled position now that the goods as cleared from the factory has to be assessed in the condition in which they are cleared. Reliance placed by the appellants in the case of Reliance Textile Industries Ltd. v. Union of India [1993 (63) E.L.T. 67] as well as Paramount Centrispun Castings Ltd. v. CCE [1995 (77) E.L.T. 705] also strengthens this view. Supreme Court has also clearly held that when once factory gate sale is ascertainable that should be taken as basis in determining the price with reference to the depot sale, in the case of Indian Oxygen Ltd., reported in 1988 (36) E.L.T. 723. It is not in dispute in the instant case that 90% of clearance of reels were sold to the dealers at the factory gate. It is not even the case of the department that reels which were cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade at the price as applicable to paper reels in which form it was cleared at the time of removal from the factory or whether duty should be discharged at the price applicable when the goods were sold. 16. Section 4(1)(a) stipulates that assessable value shall be the normal price at which the goods are ordinarily sold........for delivery at the time and place of removal. Thus, the goods, as they are removed, is the relevant consideration for the purposes of valuation and not goods as they are sold. This is also for a valid reason, excise is a levy on manufacture and not a levy on sale. This matter has also been considered by this Tribunal in several cases earlier. In the Paramount Centrispun Castings Ltd. v. Collector of Central Excise, Nagpur case reported in 1995 (77) E.L.T. 705 (T), the Tribunal considered the case of castings which were cleared from the factory of manufacture after carrying out heat treatment, scraping and fettling. Further processes were carried out at a job workers premises after the removal from the factory. These processes altogether transformed the goods; from a casting to parts. The question was what should be the basis for duty liability and the Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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