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TMI Blog2005 (3) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... ssings. The points and crossings are manufactured on job work basis. The raw material is supplied by the Railways. After manufacture the points and crossings are handed over to the Railways. In the process of manufacturing points and crossings waste/scrap to the extent of 5% arises. The waste/scrap is not returned to the Railways but is sold off by the Appellants. 3. The question for consideration is whether in computing the value of the points and crossings, the value of the scrap has got to be added. This Court has, in the case of Ujagar Prints v. Union of India reported in 1989 (39) E.L.T. 493 held that in respect of goods produced on job work basis the assessable value would include cost of material, processing charges and profit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p and sell the scrap. Thus in the example given above, it would have to be shown that the conversion charges are Rs. 450/- because Rs. 50/- is earned from the sale of scrap. If the conversion charges are not depressed or if the scrap/waste is returned then, their value will not get added. 6. The burden of proving that the price is so depressed would be on the Revenue. But one of the methods of proving it would be through the contract between the parties itself. In this case the contract is on record. The contract provides as follows: - "The prices quoted are based on the free supply of Rails by you at our works, Bharatpur, Western Railway, Rajasthan. The tonnage for Rails will be 5% more than the net requirement of Rails required for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en sold. CEGAT has so opined even though an earlier decision of CEGAT in the case of Jay Engineering Works Limited v. Commissioner of C. Ex. Hyderabad reported in 1997 (93) E.L.T. 492 (Tribunal) had been brought to its attention. In our view, CEGAT has gone completely wrong in Hindustan Engineering Industries Limited's case (supra). It must be remembered that the element of raw material is a separate element from the element of conversion charges. The value of the entire raw material used has to be taken into consideration. The element of profit/conversion charges has to be added to the element of value of raw material used. The element of job work charges being separate element from the value of raw material, If it is shown that the job ..... X X X X Extracts X X X X X X X X Extracts X X X X
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