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TMI Blog2018 (2) TMI 917X X X X Extracts X X X X X X X X Extracts X X X X ..... ntract between them and with other customers the conversion cost was determined as inclusive of fabrication cost, tool Amortization cost and packing charges as reduced by value of scrap. The department took the view that during the period 2004-05 the appellants had retained scrap value of Rs. 24,30,687/- which value was required to be added to the assessable value. Hence a SCN dated 14.07.2009 was issued to them proposing demand of an amount of Rs. 3,96,687/- with interest thereon and imposition of penalties on various provisions. On adjudication, these proposals were confirmed and on appeal the Commissioner (Appeals) vide impugned order dated 28.09.2010 upheld the order of the original authority. Hence this appeal. 2. Today when the matte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch had distinguished the judgement of the Hon'ble Supreme Court in the case of General Engineering Works (supra). She also submits that the P.R. Rolling Mills Pvt. Ltd. decision was upheld and consequently confirmed by the Hon'ble Supreme Court. 3.1 On the other hand, Ld. AR supports the impugned order. He submits that the ratio laid down by the Hon'ble Apex Court in General Engineering Works judgement is very clear and the reduction of job charges to the extent of value of the scrap retained by them is an amount which has to be included in the assessable value in such cases. 3.2 On the plea of limitation, Ld. AR submits that the decision relied upon by the Ld. Advocate does not pertain to the present appellant but only to a group company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... witches, 5% being the manufacturing wastage." ......................................................................................................................................................................... "The total requirement of Rails for different items would be forwarded to you within ten days of receipt of your formal order. Manufacturing wastage of 5% has been considered and therefore this wastage will not be separately accounted for and shall not be returned. Any surplus materials received from you against the contract, will be returned to you and dispatched to the destination as advised by you, F.O.R. Our word." 7. Thus, the contract clearly indicates that the price (conversion charges) have been worked out on the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value of raw material, If it is shown that the job work charges/conversion changes get reduced then the value of scrap has got to be included in the value of the conversion charges. Similarly, even if excise is paid on scrap it would have no bearing on the working out of the value of the points and crossings. What is left is scrap/waste. It is known and is being sold as such. In such a case the value is determined on the price realized. Further, as per the Judgment of this Court in the case of Commissioner of Central Excise, Delhi v. Maruti Udyog Ltd. reported in (2002) 3 SCC 547, the value of the scrap will be worked out on cum-duty basis. Thus no question arises, at this stage, of considering value of raw material in this scrap/waste and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal decision in the case of P.R. Rolling Mills Pvt. Ltd. will also not help the case of appellant since as per the facts therein, there was no depression of assessable value due to retention of scrap by job worker. On merits therefore we do not find any case for the appellants. 5.3. Coming to the plea of limitation, Ld. Advocate relying on Campco Chocolate Factory Vs. CCE, Mangalore 2010 (258) ELT 272 (Tri.-Bang.), contends that the decision taken on similar issue in respect of their group company led to them having a bonafide belief that the value of the scrap is not required to be added to the assessable value. However, this contention will not help their case. Ld. AR is correct in pointing out that the said decision pertains not t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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