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TMI Blog2013 (8) TMI 152X X X X Extracts X X X X X X X X Extracts X X X X ..... s the value of the job work done plus the manufacturing profit and the manufacturing expenses but not any other subsequent profit or expenses. Just as traders profit cannot form part of the assessable value traders loss cannot result in reduction in assessable value of the goods in the hands of the job-worker - Further the Apex Court in the case of Fiat India Ltd [2012 (8) TMI 791 - SUPREME COURT] did not find it proper to give deduction from cost of manufacture incurred by the actual who incurs cost of material and does the manufacturing activity by himself. So allowing deduction towards loss of the person supplying raw material to determine assessable value in the hands of the person undertaking manufacturing activity is not warranted – Appeal allowed – Decided in favor of Revenue. - Appeal No. E/1287/2004 & E/CO/39/05 - Final Order No. 40273/2013 - Dated:- 19-7-2013 - Shri P.K. Das and Shri Mathew John, JJ. For the Appellant: Shri Parmod Kumar, JC (AR), For the Respondent: Shri S. Murugappan, Advocate JUDGEMENT Per Mathew John; 1. The Respondents acted as job-workers for M/s KODAC India Ltd, Chennai ( KODAC for short), for manufacture of Unexposed Cinema ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erved as under: The price at which he is selling the goods must be the value of the grey-cloth or fabric plus the value of the job work done plus the manufacturing profit and the manufacturing expenses but not any other subsequent profit or expenses. It is necessary to include the processor s expenses, costs and charges plus profit, but it is not necessary to include the traders profits who gets the fabrics processed, because those would be post-manufacturing profits. 5. The Ld. A. R. for Revenue argues that the notification of CENTRAL EXCISE VALUATION (DETERMINATION OF PRICE OF EXCISABLE GOODS) RULES, 2000 did not change the situation in any way because the Rules did not make any special provisions with regard to valuation of goods in the hands of the job worker. The principles embodied in the said rules are in conformity with the principles laid down in the decision of Ujagar Prints (Supra). He argued that the fact that the person who was getting the goods manufactured were selling the goods at a loss cannot affect the assessable value of the goods in the hands of the job-worker and hence the deduction allowed from cost towards loss made by KODAC is not legal and orders of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er authorises the person, who actually manufactures or fabricates the said goods to comply with all procedural formalities under the Central Excise Act, 1944 (1 of 1944) and the rules made thereunder, in respect of the goods manufactured on behalf of the said manufacturer and, in order to enable the determination of value of the said goods under section 4 or section 4A of the said Act, to furnish information including the price at which the said manufacturer is selling the said goods and the person so authorised agrees to discharge all liabilities under the Act and the rules made thereunder : Provided that in respect of goods falling under Chapter 62 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), the manufacturer shall authorize the job worker, who has been authorized to pay the duty of excise leviable on such goods on his behalf under sub rule (3) of rule 4, to furnish information including the retail sale price at which such goods are sold in order to enable determination of tariff value of such goods under sub-section (2) of section 3 of the Central Excise Act, 1944 (1 of 1944) or any notification issued thereunder. Explanation. - For the purposes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 9. Process of manufacture. (SIGNATURE OF THE APPLICANT) 11. It is seen from the notification that there is nothing in the notification which speaks of the method of determining value of goods in the hands of the job-worker. The notification exempts the person supplying the raw material from provisions of Rule 9 of Central Excise Rules and also enjoins on him certain responsibilities to furnish certain relevant information. The notification is not relevant for anything more. So the question of deciding valuation has to be done with regard to Central Excise Act, 1994 and Central Excise Valuation Rules and relevant judicial pronouncements. 12. It is quite true that till 01-04-2007 the Central Excise Valuation Rules did not have clear providing how to arrive at value of goods manufactured on job-work basis. So this issue was subject matter of many litigation and finally decided by the Apex Court in the case of Ujagar Prints (Supra) and the decision was followed till 01-04-2007 when rule 10A has been introduced in the valuation rules. Ever since that the issue is still under dispute. But that is really not relevant for deciding the dispute at hand because it relates to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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