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TMI Blog2018 (7) TMI 2177X X X X Extracts X X X X X X X X Extracts X X X X ..... f the prices declared by Philips India to its customers is misconceived and erroneous. It is relevant to state that in the instant case neither in the show cause notices nor in the impugned order there is any allegation or finding that the determination of assessable value of the subject goods cleared by the appellant on which central excise duty was paid did not satisfy the requirements as laid down in UJAGAR PRINTS, ETC. ETC. VERSUS UNION OF INDIA AND OTHERS [ 1988 (11) TMI 106 - SUPREME COURT] and PAWAN BISCUITS CO. (PVT.) LTD. VERSUS COLLECTOR OF CENTRAL EXCISE, PATNA [ 2000 (7) TMI 78 - SUPREME COURT] and that the assessable value on which the central excise duty was paid was lower than the assessable value if determined on the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e show cause notices, the appellant manufactured aluminium reflector and light fittings falling under Chapter 94 of the First Schedule to the Central Excise Tariff Act, 1985 as per specifications and drawings issued by Peico Electronics Electricals Ltd. (since known as Philips India Ltd.), Kolkata and cleared the same to the said company affixing its brand name PHILIPS on the products. Central excise duty was paid on the said goods upon valuation thereof on the basis of the prices agreed upon by and between the appellant and Philips India under a principal to principal based agreement. On the basis of allegation that the appellant was required to make payment of central excise duty on the said goods upon valuation thereof at the pric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India to its customers is misconceived and erroneous. In the said decision the Supreme Court held as under: The question raised in this Writ Petition under Article 32 of the Constitution of India is as regards the determination of the market value of the goods manufactured by the petitioner company for the purposes of computation of the excise duty leviable on the same. The petitioners (manufacturers) are manufacturing electrical goods under a contract with another company known as the Bajaj Electricals Ltd. (hereafter referred to as buyers). The agreement between the parties provides for the buyers having the right to reject the goods if the goods are not in accordance with the buyers' specifications or do not come up to the stipu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame is because of the augmentation attributable to the value of the goodwill of the brand name which does not belong to the manufacturers and which added market value does not accrue to the petitioner company or go into its coffers. It accrues to the buyers to whom the brand name belongs and to whom to fruits of the goodwill belong. Excise duty is payable on the market value fetched by the goods, in the wholesale market at the factory gate manufactured by the manufacturers. It cannot be assessed on the basis of the market value obtained by the buyers who also add to the value of the manufactured goods the value of their own property in the goodwill of the 'brand name'. The petitioners are therefore right and the respondents wrong. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use it has acquired, which is not the case herein. 7. This decision has been followed by the Supreme Court in Kulwant Electrical Industries case (supra). In its decision in Cosme Farma Laboratories Ltd. s case (supra) the Supreme Court has also made it clear that the prices at which the principal brand owner sold its goods could not be the assessable value in the hands of job workers who manufactured the same because the duty is to be paid at the stage at which the goods were manufactured and cleared and not when they are sold by the brand name owner. In para 23 of the judgment it has been observed and held as follows: 23. Once it has been determined that the job workers are the manufacturers, the assessable value of the goods wo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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