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TMI Blog2013 (8) TMI 770X X X X Extracts X X X X X X X X Extracts X X X X ..... engaged in building body on the chassis sent by M/s. Tata Motors Ltd. and other suppliers of chassis on job work basis. 3. As per Chapter Note 5 in Chapter 87 of the Central Excise Tariff, building of body or fitting of a structure or equipments on the chassis falling under Heading 8706 amounts to manufacture of motor vehicle. The appellants have received chassis with accessories supplied by Tata Motors and other suppliers for the manufacture of dumpers/body built motor vehicles (CET 8706). They have also availed Cenvat credit on chassis supplied and also on other inputs used in the dumpers/body built motor vehicles. After manufacturing, the finished goods were cleared to depot/regional sales office of Tata Motors, Bhiwandi and others on payment of duty. However, it was noticed by the department that the depot sale invoices of Tata Motors were showing higher value than that shown in the invoices issued by the appellants. As per Rule 10A of the Central Excise Valuation Rules, 2000, w.e.f. 1-4-2007 where the excisable goods are produced or manufactured by a job worker on behalf of a person (hereinafter referred to as principal manufacturer), then in a case where the goods are sold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; Jiwan Singh & Sons v. State of Punjab, 1963 (14) STC 957 (P & H); 6. Commissioner of Sales Tax v. Haji Abdul Majid & Sons, 1963 (4) STC 435. He submitted that since the body is sold by the appellants to Tata Motors for the purposes of Central Excise law, a complete/fully built motor vehicle is cleared by the appellants and accordingly the duty is being paid on full value of the vehicles and therefore, the value of the vehicle is determined under Section 4(1) of the Central Excise Act read with Rule 6 of the Valuation Rules, 2000. He, therefore, submitted that applicability of Rule 10A is not relevant in the present case as the value is being determined by a specific provision of Rule 6 read with Section 4(1)(a) and while applying the Valuation Rules, one has to go sequentially through the Valuation Rules and he relied upon the decision of the Larger Bench in the case of Ispat Indusries v. CCE - 2007 (209) E.L.T. 185 in this regard. He further submitted that Rule 10A of the Central Excise Valuation Rules will be attracted only when the goods are manufactured "on behalf of" and since the transaction between the appellants and Tata Mot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n support of his contention that "on behalf of" cannot be synonymous with "for or on behalf of". 7. The ld. Sr. Advocate further continued that in the decision of the Supreme Court in the case of Prestige Engineering (I) Ltd. [1994 (73) E.L.T. 497 (S.C.)] it was held that when the job worker contributes his own raw material to the article supplied by the customers and manufacturers goods it does not amount to job work. He, therefore, submitted that the value under Rule 10A of the Central Excise Valuation Rules cannot be determined in the facts and circumstances of this case and the value is to be determined under Rule 6 read with Sec. 4(1)(a) of the Central Excise Act. 8. The ld. Sr. Advocate further pointed out that there are quantification errors in quantifying the demand in all the appeals as the Commissioner has not deducted the sales tax amount from the value while demanding duty from the appellants and the Commissioner has not given benefit of Cenvat credit of chassis supplied by Tata Motors and since the issue relates to interpretation of Valuation Rules, there cannot be any penalty in the present case. 9. Ld. Commissioner (A.R.) appearing for the Revenue submitted that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall be the transaction value of the said goods sold by the principal manufacturer; (ii) in a case where the goods are not sold by the principal manufacturer for delivery at the time of removal of goods from the factory of the job worker, but are transferred to some other place from where the said goods are to be sold after their clearance from the factory of job worker and where the principal manufacturer and buyer of the goods are not related and the price is the sole consideration for the sale, the value of the excisable goods shall be the normal transaction value of such goods sold from such other place at or about the same time and, where such goods are not sold at or about the same time, at the time nearest to the time of removal of the said goods from the factory of job worker; (iii) (i) or (ii), provided if any excisable goods - Explanation. - For the purpose of this rule, job worker means a person engaged in the manufacture or production of goods on behalf of a principal manufacturer, from any inputs or goods supplied by the said principal manufacturer or by any other person authorised by him." 12. On going through Rule 10A it is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 'provision of service on behalf of the client'. It was in a case of taxable activity falling within the category of 'business auxiliary service' while the 'client' is obliged to provide some service to a 3rd person but instead of the client providing such service, the service provider provides such service to the 3rd person, on behalf of the client : i.e. "acting as an agent of the client". With this observation it was opined that it would not fall under business auxiliary service or any other existing taxable services. 18. Apparently, the Board's opinion was in relation to the service tax matter. It was in relation to the activity which was in question and to ascertain whether it would fall under the category of 'business auxiliary service' or not. In that regard, the expression 'provision of service on behalf of the client' and more particularly the term, "on behalf of" was sought to be explained by the Board. The explanation in relation to such expression used in a provision in a particular taxing statute cannot be straightway applied to understand the meaning of the similar expression used in a different statute, more particularly ignoring the context in which it is used. If ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he motor vehicle. The purchase order to which our attention was drawn, also refers to the expression sub-contracting. With reference to the same it was sought to be contended that there was a contract between the manufacturer of chassis and the said firms in relation to the manufacture of body building for the purpose of fabricating and mounting on the chassis manufactured by the chassis manufacturer. However, no copy of any such agreement has been placed on record nor it appears to have been made available to the Commissioner before passing the impugned order. The purchase order also refers to terms and conditions but it states that the same are printed overleaf. However, the copies of the purchase order placed on record do not disclose any of the terms and conditions having been printed on those purchase orders either on the front page or overleaf. Though we need not draw adverse inference for failure on the part of the appellants in this regard, yet it is not possible to ignore the same totally while dealing with the matter, as the issue involved clearly required the appellants to establish therein contention that they are the sub-contractors as claimed by them. If the document ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st payable thereon from the appellants." 13. The submissions with regard to reliance on the circular issued by the CBEC in respect of service tax matter and reliance on the decision in Prestige Engineering (India) Ltd. (supra) were considered by the Tribunal in the case of Audi Automobiles and these submissions were not accepted by the Tribunal. 14. The ld. Sr. Advocate also relied on the following decisions to prove his case that when the body is sold, it is a sale as per the Sale of Goods Act, 1930 :- 1. Patnaik & Company v. State of Orissa 2. Mackenzies Ltd. v. State of Maharashtra 3. Commissioner of Commercial Taxes v. M.G. Brothers 4. Pothula Subba Rao v. State of A.P. 5. Jiwan Singh & Sons v. State of Punjab 6. Commissioner of Sales Tax v. Haji Abdul Majid & Sons. All these decisions were in respect of dispute with regard to levy of sale tax in respect of body built on chassis. These decisions are, therefore, distinguishable from the present case as the dispute before us is with regard to valuation of the goods under Rule 10A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present case the appellants are sub-contractors in relation to the body building activity on the chassis. Purchase Order also referred to the expression "sub-contracting" and the appellants had not produced before us any copy of the agreement between the Tata Motors and the appellants. In the absence of any detailed contract as was available in the case of M/s. Innocorp. Ltd. before the Tribunal in that case, the ratio of the said decision is not applicable to the present case. 18. We are, therefore, of the view that the decision of the Audi Automobiles cited supra is squarely applicable to the present case before us and accordingly we hold that the value of the goods supplied by the appellants is to be determined under Rule 10A of the Central Excise Valuation Rules, 2000 and not under Rule 6. We, therefore, do not find any infirmity in the Orders-in-Original with regard to valuation of the goods under Rule 10A of the Valuation Rules. Since the duty is required to be paid under Rule 10A, interest is also required to be paid on the duty quantified by the department. Accordingly, we uphold the Orders-in-Original with regard to confirmation of duty under Rule 10A of the Valuation Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X
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