2017 (1) TMI 547

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..... d of M/s Savita Chemicals Ltd against the first referred order are disposed off by this common order. 2. The dispute relates to alleged short-payment of duty by non-inclusion of the royalty expense in the assessable value computed by the job-worker, M/s Tarapur Grease Industries Pvt Ltd, for use of the brand Idemitsu under agreement between M/s Savita Chemicals Ltd and M/s Idemitsu Lube (Singapore) P Ltd. While the job-worker claims that they are liable to duty only on processing charges, the original authority has held that their contention is not correct as money value of free supply of goods by principal is required to be included in assessable value in the hands of job-worker. Consequently, duty was confirmed along with interest. Both .....

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..... e eyes of law. Therefore, whatever may be the transaction of the principal manufacturer has nothing to do with the value job worked goods. Further, to make the issue very clear it may be stated that if the appellant is a manufacturer of the subject goods with the brand name and is paying royalty charges, then definitely the charges has to be included in the assessable value since he has to recover the same from the ultimate customer. In the instant case the royalty charges were paid by the principal manufacturers, who are not the central excise assessee in the eyes of law. Under the above circumstances, as rightly held by the various Tribunals in the following cases (i) CCE coimbatore Vs. SHS Electronics [2005 (68) RLT 654], (ii) Frozen Foo .....

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..... their job worker who did not pay anything of such value to the brand name owner. The view taken by the original authority has rightly been overruled in the impugned order by ld. Commissioner (Appeals). We do not find any reason to interfere with the impugned order. The appeal of the Revenue is accordingly, rejected." 4.2 From the above it is seen that the above decision squarely covers the issue on hand. Under the above circumstances, I hold that the appellant is not liable to include the royalty charges we find this to be so. 4. Consequently, the demand against the job-worker fails along with the imposition of penalty; the imposition of penalty on M/s Savita Chemicals Ltd also fails. 5. For the above reason, we set aside the impugned .....

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