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TMI Blog2003 (5) TMI 463X X X X Extracts X X X X X X X X Extracts X X X X ..... The medicines bearing brand names of others were manufactured by the Appellants on loan license basis and the duty was paid thereon on the basis of the selling price of the goods prevailing at the Depots, branches and the selling places as declared by the said loan licensees. With effect from 23-2-1999, the Appellants filed a revised price declaration for the purpose of determining the assessable value of the products of M/s. Almet Corporation Ltd., Aurangabad on the costing basis. Such costing was duly supported by the Chartered Accountant s certificate. The Appellants had manufactured the said goods on loan license basis and in turn they got the job charges i.e., conversion charges. As the Appellants cleared the said goods to M/s. Almet Corporation Ltd., it was felt that the transaction between the Appellants and M/s. Almet Corporation Ltd. was not a sale but transfer of goods. Further, the normal sale price of the said product was available at the time and place of removal to the wholesale dealers as defined under Section 4 of Central Excise Act, 1944. As per Section 4(4)(b)(iii) of the Central Excise Act, 1944 the place of removal also includes any other place or premises fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d person in the premises, the order of adjudicating authority needed to be set aside. 4. The Appellants were heard on their stay application which was decided by Commissioner (Appeals) Central Excise, Mumbai on 28-2-2001 wherein the Appellants were directed to furnish a bond for the entire amount of duties confirmed in the impugned order and give a bank guarantee equivalent to 25% of the disputed duties within a period of 15 days from the date of receipt of the said order. Since, the Appellants failed to comply the said order dated 28-2-2001; the said appeal was dismissed by the Appellate authority on 30-3-2001. The Appellants filed an appeal with CEGAT (WRB), Mumbai who vide their Order No., C-II/3280-81/WZB/2001 dated 28-12-2001 set aside the order of the Commissioner (Appeals) and remanded the matter back to the Appellate Authority for disposing the appeal on its merits. 5. Accordingly the case was posted for hearing on 30-5-2003 before the undersigned. Shri Rajeev Waglay, the Chartered Accountant and the authorized representative of the Appellants, appeared before me for the personal hearing. He handed over a paper book containing therein their written submissions to be ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, therefore, that the transaction between the Appellants and M/s. ACL were of a Principal and an Agent. Since, there was no sale involved in the removal of goods from the factory premises of the Appellants to the Depot of M/s. ACL, the Central Excise duty was required to be discharged on the Depot price of M/s. ACL i.e. the price at which the goods were sold in the wholesale market, it was, therefore, alleged that the determination of the assessable value on the costing basis, as declared by the Appellants, was improper. Moreover, since the selling price of the goods in question was known at the depots i.e. the place of removal as defined under Section 4(4)(b)(iii) of the Central Excise Act, 1944, the costing method as envisaged under Central Excise (Valuation) Rules, was unwarranted. 8. It is significant to note that the SCN dated 18-2-2000, which was impugned before the Adjudicating authority, nowhere alleged that the Appellants were manufacturing the excisable goods in question on account of M/s. ACL who were availing exemption from operation of Rule 174, as envisaged under Notfn. No. 27/92-C.E. (N.T.), dated 9-10-1992 in respect of the goods manufactured by the Appellants. F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clude the value of raw materials in hands of job worker plus value of job work, plus manufacturing profits and manufacturing expenses. It was also clarified that the traders profits, who got goods manufactured from a job worker, was not required to be included in manufacturing expenses because those would be post manufacturing profits. 10. Further, the Hon ble Tribunal in their decision in the case of Kalyani Ferrous India Ltd. v. Commissioner of C. Ex., Belgaum - 2002 (148) E.L.T. 341 (Tri. - Bang.) have held that - Valuation (Central Excise) - Job work - Goods manufactured by appellants on job work basis and cleared to customer in a manner not involving sale, to be valued on the basis of costing data as per Apex Court s clarificatory order in Ujagar Prints case as reported in 1989 (39) E.L.T. 493 (S.C.) and not as per sale price of goods sold to other independent buyers on account of such customer, Section 4 of Central Excise Act, 1944 . 11. The Central Board of Excise Customs in their Circular No. 619/10/2002-CX., dated 19-2-2002, after examining the matter in detail, again clarified that :- 3. Under the new valuation provisions, introduced with effect from 1-7-20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their directions. Since, the Depot price was available, so the price under Section 4(1)(a) was available and the duty should have been paid on the price at such Depots only by the Appellants. 14. I do not see any merit in the adjudicating authority s aforesaid findings. There was no case for the department, as made out in the SCN, that the Appellants had contravened the provisions of Notfn. No. 27/92-C.E. (N.T.), dated 9-10-1992. Merely because the excisable goods, in question, manufactured by the Appellants were not sold but transferred to the sale depots of M/s. ACL, it can not be concluded that the relationship between M/s. ACL and the Appellants was that of a principal and an agent and the assessable value of such goods should be the price at which the same were sold by the said principal i.e. M/s. ACL from their sale depots. Reliance is placed upon CEGAT s decision in the case of Pearl Soap Co. v. Commissioner Central Excise, Mumbai-II - 2001 (138) E.L.T. 1317 (Tri. - Mum.) and also upon CEGAT s decision in the case of Ultra Lubricants (India) (P) Ltd. v. Commissioner, Central Excise, Mumbai - 2002 (150) E.L.T. 580 (Tri. - Mum.). 15. I find that the adjudicating authority ..... X X X X Extracts X X X X X X X X Extracts X X X X
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