9911796707
TMI Blog2020 (3) TMI 907X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant, is only getting the job work charges which should have been the case if it is a job work simpliciter; nor has the Revenue established that the goods manufactured by the appellant are supplied free of cost to M/s. M M. Any amount of supervision per se, may not be sufficient to treat the assessee-appellant as a job worker - there are no merit in the impugned orders on the merits as well as on the principles of consistency and consequently, the same are set aside. Extended period of limitation - HELD THAT:- Revenue was aware of the method adopted by the assessee since the Revenue itself had conducted periodical audits from 2011 onwards, documents evidencing which, are also part of the Paper Compilation - there is no scope at all for the Revenue to allege suppression, fraud, etc., to invoke the larger period of limitation. Appeal allowed - decided in favor of appellant. - Excise Appeal No. 26175 of 2013, 26177/2013, 26178/2013, 20300/2014, 21494/2015, 30088/2017 - Final Order Nos. 31092-31097/2019 - Dated:- 17-9-2019 - HON BLE MR. P. VENKATA SUBBA RAO, MEMBER (TECHNICAL) AND HON BLE MR. P. DINESHA, MEMBER (JUDICIAL) Shri. Y. Sreenivasa Reddy, Advocate And Ms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e negotiated price was at arm s length and therefore, the applicability of both Rules 8 and 10A ibid were denied. 3.2 Further, the appellant also relied on the decision of the Hon ble Supreme Court in the case of Joint Secretary to Govt. of India Vs. M/s. Food Specialties Ltd. reported in 1985 (22) E.L.T. 324 (S.C.) as also the decisions of the Tribunal in the cases of Commissioner of Central Excise, Bombay Vs. M/s. Crown Tobacco Co. reported in 1999 (111) E.L.T. 150 (Tribunal) and Collector of Central Excise, Bombay Vs. M/s. Standard Metal Works reported in 1998 (98) E.L.T. 447 (Tribunal), in its support. 4. The Adjudicating Authority, viz., the Commissioner of Customs, Central Excise and Service Tax, Hyderabad-IV, however, vide orders impugned herein, confirmed the demands as proposed in the Show Cause Notices, along with interest and penalty. 5. Aggrieved, the present appeals are filed by the assessee. 6. Today when the matter was taken up for hearing, Shri. Y. Sreenivasa Reddy and Ms. Siri Reddy, Ld. Advocates, appeared for the assessee-appellant and Shri. V.R. Pavan Kumar, Ld. Departmental Representative, appeared for the Revenue-respondent. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant. 10.2 There is no dispute that the appellant has in fact discharged the duties before supplying the goods in question to M/s. M M which is based on the purchase price, as given in the respective agreements. This indicates that the goods in question have been manufactured by the appellant at a cost and thereafter, cleared on payment of duty. 11.1 The decision of the Co-ordinate Ahmedabad Bench of the Tribunal in the case of M/s. Rolastar Pvt. Ltd. (supra) involves the following facts : 2. The relevant facts that arise for consideration are the appellants herein cleared finished products (hallow profiles) manufactured on job work basis, back to their principal who had given the raw material for doing such job work, paying duty, on cost of production of the raw material plus job charges. Revenue Authorities were of the view that provisions of Rule 10(a) of the Central Excise (Valuation) Rules, 2000, effective from 1-4-2007 will apply to this case and the appellant should have discharged the duty liability as a job worker on the basis of 110% of cost of production as per Rule 8 read with sub-rule (iii) of Rule 10(a) of the Valuation Rules, as the principal who h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s shall be the transaction value of the said goods sold by the principal manufacturer; (ii) in a case where the goods are not sold by the principal manufacturer at the time of removal of goods from the factory of the job-worker, but are transferred to some other place from where the said goods are to be sold after their clearance from the factory of job-worker and where the principal manufacturer and buyer of the goods are not related and the price is the sole consideration for the sale, the value of the excisable goods shall be the normal transaction value of such goods sold from such other place at or about the same time and, where such goods are not sold at or about the same time, at the time nearest to the time of removal of said goods from the factory of job-worker. (iii) in a case not covered under clause (i) or (ii) the provisions of foregoing rules, wherever applicable, shall mutatis mutandis apply for determination of the value of the excisable goods. Provided that the cost of transportation, if any, from the premises wherefrom the goods are sold, to the place of delivery shall not be included in the value of excisable goods. Explanation. - For the purp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... some other job worker of the appellant, in his factory for further manufacturing of goods. In the absence of any such situation, we are of the view that provisions of Rule 8 will not come into play. As already reproduced herein above, it is undisputed that LABSA is manufactured by job worker and cleared to HUL for further consumption and the said LABSA is the intermediate product required by HUL which is manufactured or produced by the appellant as a job-worker. The key words in Rule 8 that needs to be interpreted are consumption by an assessee or on his behalf for applying the said Rule for arriving at valuation or determination of goods. In the case in hand, it is very clear and not disputed that the appellant is not consuming the said LABSA nor is it consumed on his behalf by HUL. In our considered view, the provisions of Rule 8 will not get attracted in this case. 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 clarification. F.No. 6/L5/2009-CXI Government of India Ministry of Finance Department of Revenue Central Board of Excise and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Rules, 2000 which came into force w.e.f. 1-7-2000. We read that Rule : Rule 8. Where the excisable goods are not sold by the assessee but are used for consumption or on his behalf in the production or manufacture of other articles, the value shall be one hundred and fifteen per cent of the cost of production or manufacture of such goods A perusal of the above Rule makes it clear that it relates to valuation of excisable goods not sold by the assessee but are used for consumption or on his behalf in the production or manufacture of other articles . This is clearly not the case here. The goods are not being captively consumed by the assessee himself or on his behalf by somebody else. There could be no argument that this rule has any relevance to the present case. Learned counsel for the appellants has also pointed out that the valuation carried out under the impugned orders is contrary to the clarification issued by the Central Board of Excise and Customs vide Circular No. 619/10/2002-CX. dated 19-2-2002. Paras 2 and 3 of the Circular read as under : 2 The matter has been examined by the Board. It is observed that the system of getting goods manufactured on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 10. In yet another case, this Tribunal has very clearly held that provisions of Rules 8 not applicable to a situation of job worker. The said ratio of the judgment is reproduced as under :- 4. Rule 8 of the valuation Rules reads Where the excisable goods are not sold by the assessee but are used for consumption by him or on his behalf in the production or manufacture of other articles, the value shall be one hundred and fifteen per cent of the cost of production or manufacture of such goods. For the provision of this rule to apply, therefore, two requirements are to be fulfilled. The first is that the excisable goods that the assessee manufactures are not sold by him. The second/s that they must be used for consumption either by him or on his behalf in the production of manufacture of other articles. While the first condition is fulfilled, that there is no sale by the assessee, the second th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia Ltd. and hence it was held that Rule 8 will be applicable. It can be seen that in that case, Rule 8 was invoked because it was undisputed that repacking was done on behalf of Reckitt Benckiser India Ltd which would clearly attract the provisions of Rule 8. The situation in the current appeal before us is totally different which has been set out by us in the earlier paragraphs. In view of this, the decision of this bench in the case of Ultrapack will not be applicable. 13. In the facts and circumstances of the case, in the impugned orders are unsustainable and are liable to be set aside and we do so Impugned orders set aside and appeals allowed. 11.2 Finally, the Bench referred to another decision of the Tribunal in the case of Commissioner of C.Ex., Ahmedabad Vs. M/s. Palco Metals Ltd. reported in 2011 (23) S.T.R. 389 (Tri. Ahmd.) wherein it has been held as under : 7. Admittedly, the goods were manufactured by the appellant, though out of the raw material supplied by M/s. Sai Flipped Coil Pvt. Limited, the liability to pay duty on the said goods was on the appellant and not on M/s. Sai Flipped Coil Pvt. Limited. Since the goods were not sold by the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Civil Appeal Nos. 1988-1989 of 2012 with C.E.A. Nos. 3606-3609 of 2012 [reported in 2013 (298) E.L.T. A186 (S.C.)]. 12.2 Interestingly, Ld. Advocate for the assessee brought to our notice that for subsequent different periods, the Ld. First Appellate Authority was pleased to accept the assessee s contentions against similar demands of valuation and vide different orders viz., Order-in-Appeal No. HYD-EXCUS-MD-AP2-0101-18-19 CE dated 21.03. 2019 and Order-in-Appeal No. HYD-EXCUS-004-APP-020-16-17 dated 10.08.2016, has set aside demands raised by the Original Authority, copies of which were also furnished for our benefit as well as the Revenue. To our question as to any further appeals in respect of the above Orders-in-Appeal, it was informed that the Revenue has accepted the above Orders-in-Appeal. 13.1 It is not the case here by the Revenue that the manufacturer, i.e., the appellant, is only getting the job work charges which should have been the case if it is a job work simpliciter; nor has the Revenue established that the goods manufactured by the appellant are supplied free of cost to M/s. M M. Any amount of supervision per se, in our view, may not be sufficient to trea ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
