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TMI Blog2017 (10) TMI 1174X X X X Extracts X X X X X X X X Extracts X X X X ..... d goods to M/s Honda Siel Cars India Ltd (in short "HSCIL"), out of the raw materials i.e. mid components (known as "child arts") supplied free of cost (FOC) by HSCIL for welding as well as using their in-house materials into finished goods. 2. Excise duty was paid by the appellant, during the period in question, on the assessable value by including the cost of FOC material supplied, amortized cost of tools supplied by HSCIL and conversion/job charges including profit at the time of clearance of their finished goods to HSCIL. 3. The valuation adopted by the appellant for payment of excise duty was objected to by the audit team which led to issuance of SCN dated 30.04.2014, wherein proposal was made for recovery of differential excise duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in Ujagar Print (supra). Thus, both Rule 8 & 10A (iii) were not applicable in the present case. He also relied on several case laws including the following: (i) Shivani Detergent Pvt Ltd Vs CCE Indore. Final Order No. A/54617/2016-EX(DB) dated 28.10.2016. (ii) Rolastar Pvt Ltd Vs CCE Daman, 2012 (276) ELT 87 (Tri.Ahmd.) affirmed by Supreme Court Commissioner Vs Rolastar Pvt Ltd., 2013 (298) ELT A186 (SC). (iii) Advance Surfactants India Ltd Vs CCE, Mangalore, 2011 (274) ELT 261 (Tri.-Bang.) 5. The ld DR justified the impugned order. He submitted that the activity undertaken by the appellant is in the nature of job work and hence, Rule 10A will be applicable. As per sub-rule (iii) of Rule 10A, the valuation has been done correctly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t uses other consumables in the manufacture of LABSA. It is also undisputed that the appellant has been valuing the said LABSA cleared from factory premises, based upon the cost of material plus processing charges prior to 1-4-2007 when the provisions of Rule 10A were inserted into the Central Excise Valuation Rules, 2000. It is also undisputed that the said LABSA is returned back to M/s. HUL for further consumption in their factory premises for manufacturing of soaps and detergents. It is nobody‟s case that LABSA consumed by HUL is on behalf of the appellant herein. 8. At this juncture, we find that a clarification which has been issued by the Ministry of Finance dated 31-3-2010 needs to be addressed to. We reproduce the said clarif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the clarification issued by the C.B.E.C. seems to be untenable in view of the foregoing reasons. The views expressed in the Circular are inconsistent with the provisions of Rule 8. The provisions of Rule 8 can be brought into play only if there is consumption of the goods by himself or on behalf of an assessee. Since the said clarification is against the mandate of the said Rule 8 of Central Excise Valuation (Determination of Prices of Excisable Goods) Rules, the said clarification is untenable and has to be held as such. 9. We find that our above view has been confirmed by the bench in the Tara Industries Ltd. case (supra). We may reproduce the said ratio. "2. The appellants manufacture „Wool Tops‟ on job work basis out of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : "2. The matter has been examined by the Board. It is observed that the system of getting goods manufactured on job work basis is not new. Under the provisions of the earlier Section 4 and the Rules made thereunder the matter has been finally decided by the Apex Court in the case of Ujagar Prints Ltd. [1989 (39) E.L.T. 493 (S.C.)] and the case of Pawan Biscuits Co. Pvt. Ltd. [2000 (120) E.L.T. 24 (S.C.)]. It was clearly held that in respect of goods manufactured on job work basis, assessable value would be the job charges (including the profit of the job worker if not already included in the job charges) plus the cost of the materials used in the manufacture of the item (including the costs of the materials supplied free of cost to the j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 (39) E.L.T. 493 (S.C.)] even after 1-7-2000. The original valuation and payment of duty took place according to the principle of valuation approved by the Apex Court. The impugned orders are contrary to the specific provisions of valuation rules as well as clarification issued by the Central Board of Excise and Customs. They are required to be set aside. We do so and allow the appeals. In view of our disposing of the appeals themselves, stay petitions do not survive." 5. We also note that the Hon‟ble Court affirmed the decision of the Tribunal in Rolastar Pvt. Ltd. - 2013 (298) E.L.T A-186 (SC). 6. In view of the above settled position, we find no merit in the impugned order and accordingly the same is set aside. The appeal is all ..... X X X X Extracts X X X X X X X X Extracts X X X X
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