9911796707
TMI Blog2016 (4) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... d the trader's profit and various other costs incurred for cutting, packing, etc. to discharge the duty liability as the goods i.e., processed fabrics were cleared from the factory gate of the respondent directly to the buyers of the goods of Risha. The adjudicating authority confirmed the demands raised with interest and also imposed penalties. On an appeal filed by the respondent-assessee, the first appellate authority, relying upon the judgment of the apex Court in the case of Ujagar Prints etc. etc. vs. Union of India 1989 (39) ELT 493 (SC) held that cost of the goods on which duty liability has to be discharged cannot include the trader's profit. 3. The learned Departmental Representative would submit that the Revenue is aggrieved by the said order on the ground that the first appellate has not considered the judgment of the apex Court in the case of Pawan Biscuits co. (Pvt.) Ltd. vs. Collector of Central Excise, Patna 2000 (120) ELT 24 (SC) and the ratio of Ujagar Prints (supra) case. It is his submission that the assessable value of the processed fabrics would be the value of the grey cloth in the hands of the processor. The value of the job-work done cannot exclude ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmissions made at length by both the sides and perused the records. 6. The only issue that falls for consideration in this case is whether the valuation of the goods manufactured on job-work basis and allegedly sold at processor's factory-gate needs to be loaded with the trader's profit and discharge excise duty or otherwise. 7. It is undisputed that the respondent is undertaking jobwork of processing the grey fabrics sent to them by Risha and has filed various price declarations with the authorities as prescribed during the relevant period based upon the information given by Risha and had cleared the processed goods on an assessable value worked out on the basis of cost of grey fabrics and job-work charges. 8. We find that the entire appeal of the Revenue is based on challenge to the said impugned order only on the ground that the respondent had not included the cost of cutting, checking and packing of the grey fabrics and that M/s. Risha had no factory premises and the clearances to Risha's customers took place at the factory-gate of the respondent and as per the judgment of the apex Court in the case of Ujagar Prints (supra) deemed factory-gate would the factory- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deemed price at which the processed fabric would leave the processor's factory plus his profit. Rule 174 of the Central Excise Rules, 1944 enjoins that when goods owned by one person are manufactured by another the information is required relating to the price at which the said manufacturer is selling the said goods and the person so authorised agrees to discharge all the liabilities under the said Act and the rules made thereunder. 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 trader's profits who gets the fabrics processed, because those would be post-manufacturing profits." 10. It can be seen from the above reproduced order that the assessable value should be the value worked out based on the cost of the material and the job-work charges. The Revenue's claim that the respondent had collected over and above the job-charges in the form of cutting, checking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. We reproduce paragraph 15 and 16 "15. A job worker may undertake manufacturing of excisable goods on account of others from the raw material supplied to him free of cost, and on return of the goods so-manufactured to them he takes job charges i.e manufacturing expenses plus his manufacturing profits. In some cases, the job worker also uses some of materials of his own and includes their cost in the jobcharge. After job work is done the excisable goods so manufactured may also be delivered to their agents, or buyers as per their instructions. Since the duty of excise is on manufacture of excisable goods, irrespective of whether the manufacturer is owner of the goods or not, the job worker has to pay the duty. The Hon'ble Supreme Court has given a landmark decision in the aforesaid case of Ujagar Prints that the value of goods manufactured on job work basis, would be the value of raw materials in the hands of job worker plus job charges including manufacturing profit; but it does not include the selling expenses and trader's (ie. Supplier of raw materials) profits because those would be post manufacturing profits. To make the position clear, the Hon'ble Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
