9911796707
TMI Blog2007 (2) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... imposed under rule 26 of the Central Excise Rules, 2004, on the appellant Eicher Motors Ltd. and Mr. Ashok Sharma, Director of Bhagirath Coach and Metal Fabricators Pvt. Ltd. 2. The questions arising in these appeals centre around interpretation and application of rule 8 of the Central Excise Valuation (Determination of Price Excisable Goods) Rules, 2000. The appellant Bhairath Coach and Metal Fabriators Pvt. Ltd. is engaged in the manufacturing and clearing of complete body built motor vehicles on job work basis for the automobile manufacturer, who is tie appellant Eicher Motors Ltd. The job work is done by fabricating and mounting the bodies of bus and truck on chassis supplied by Eicher Motors Ltd. after making payment of duty on the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lied. This position is clear from the observation of the Apex Court in the case of Pawan Biscuits Co. (Pvt.) Ltd. 'the cost of raw material supplied by Britannia will have to be included in addition to the appellants manufacturing costs and profit of raw material'. (Emphasis supplied). Treating Central Excise assessable value as equivalent to cost of goods evidently creates problems. In many cases like MRP or tariff value based valuation or Rule 8 Valuation, assessable value is a normal value and does not reflect cost of the item. Such a notional valuation would not be appropriate in determining the cost of an item. In these circumstances, we are of the view that the issue raised in the appeal is covered in favour of the appellant by the af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee, their value was required to be determined in such manner, as may be prescribed by the rules. In the present case, the job worker did not sell the final product and, therefore, valuation was required to be done under Section 4(1)(b), as prescribed under the rules.' 5.1 Under the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, which came into force from 1-7-2000, rule 3 lays down that the value of any excisable goods shall for the purpose of clause (b) sub-section (1) of Section 4 of the Act be determined in accordance with these rules. Rule 2(c) defines the words "value" so as to mean the value referred to in Section 4 of the Central Excise Act. Rule 8 of the said Rules, around which the cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for working out the value of the final product, which again, since it was not sold by the job worker, attracted the provisions of Section 4(1)(b) of the Act read with the said rules including Rule 11. We are, therefore, unable to subscribe to the opinion expressed in Bhilwara Processors Ltd. (supra) and it appears to us that if the actual cost method of the input is to be followed de hors the provisions of Rule 8, it would result in fortuitous and unintended benefit to the job-worker who takes the cenvat credit of the duty which was paid on such inputs on the basis of the valuation done under Rule 8. 7. Having regard to the importance of the issue involved, the matter deserves to be referred to the Larger Bench on the following issues :- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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