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TMI Blog2007 (2) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... d. with a penalty of the like amount imposed on it with an order to pay interest on the duty amount and penalties of Rs. 1 crore (one crore) and Rs. 5 lacs (five lacs) have been 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 appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... find merit in the appellants' submission that assessable value for processed fabric is to be arrived by adding the processing charges and processing profit to the cost of the grey fabric supplied. 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 valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from paragraph 16 of the judgment in Pawan Biscuits Co. (Pvt.) Ltd. (supra). 5. Under Section 4(b)(1) of the Central Excise Act, 1944, it is provided that in any case where the excisable goods are not sold by 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich admittedly the duty was paid by Eicher Motors Ltd. while sending the chassis to Bhagirath Coach and Metal Fabricators Pvt. Ltd. for the job work. The value on which the goods were received by the job worker can constitute the basis 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 cred ..... X X X X Extracts X X X X X X X X Extracts X X X X
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