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TMI Blog2024 (1) TMI 720X X X X Extracts X X X X X X X X Extracts X X X X ..... LTD. VERSUS PRINCIPAL COMMISSIONER OF CENTRAL EXCISE, CHENNAI-I AND COMMISSIONER OF GST CENTRAL EXCISE, CHENNAI VERSUS SUJHAN INSTRUMENTS [ 2018 (7) TMI 420 - CESTAT CHENNAI ] to set aside the demand as well as the penalties. The demand cannot sustain. Consequently, the penalty imposed on M/s. Roca also cannot sustain. The impugned order is set aside - Appeal allowed. - MRS. SULEKHA BEEVI C.S., MEMBER (JUDICIAL) AND MR. VASA SESHAGIRI RAO, MEMBER (TECHNICAL) Ms. P. Jayalakshmi, Advocate For the Appellant Shri N. Satyanarayanan, Assistant Commissioner (A.R.) For the Respondent ORDER This issue involved in all these appeals being similar and connected, they were heard together and are disposed of by this common order. 2. The brief facts in Appeal Nos. E/40202/2016 and E/40601/2017 are that the appellants viz; M/s. Innova India are engaged in the manufacture of electronic flushing systems (EFS) falling under Chapter Heading 69 of CETA, 1985. On verification, it was found that the appellants were manufacturing the EFS system bearing the brand name parryware and clearing the same on payment of duty. The appellant was manufacturing the said products ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Valuation (Determination of Price of the Excisable Goods) Rules, 2000, under Section 4(1)(b) of the Central Excise Act, 1944. The Show Cause Notice was issued to the appellant M/s. Inova India demanding the short paid duty along with interest and also for imposing penalties. 5. On the similar set of facts, Show Cause Notice was issued to M/s. Roca Bathroom alleging that they have connived along with M/s. Inova (appellants in the above appeals) and thus proposing to impose penalties. Appeal Nos. E/40201/2016 E/40600/2017 have been filed by M/s Roca aggrieved by the penalties imposed. 6. The Ld. Counsel Ms. P. Jayalakshmi appeared and argued for the appellant. It is submitted that the Department has raised the duty demand against M/s. Inova India Ltd. and imposed penalties on M/s. Roca Bathroom on a wrong presumption that M/s. Roca Bathroom has supplied free of cost the urinal casing required for the manufacturing of flushing system. It is submitted that the appellant M/s. Roca has not supplied any material free of cost to M/s. Inova India Ltd. and therefore the M/s. Inova Indian Ltd. cannot be said to be a job worker of M/s. Roca Bathroom The Ld. counsel adverted to the defi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the product M/s. RBPPL had to give instructions on such fixing of product to urinal casing. 6.6 It is a settled law that person actually manufacturing will be the manufacturer as held in Madras High Court decision in Abdul Lateef vs. CCE 1985 (22) ELT 758 (Mad.HC) and confirmed by Supreme Court 1990(47) ELT A101 in CCE vs. Kerala State Electricity Board when confirming the decision of Tribunal 1990 (47) ELT 62. There is no allegation of selling urinal casing at a depressed price to the appellants and even then there can be a case for mis-declaration of value but does not make M/s. RBPPL as Manufacturer. 6.7 Even if product manufactured are supplied and sold by appellants under the brand name of M/s. RBPPL it cannot be said that goods were not manufactured on principal to principal basis . The Department have raised the issue indirectly to the effect that M/s. RBPPL are the real manufacturers and not the appellants by laying down the factors referred to earlier, which are not relevant to decide the issue whether valuation adopted by the appellants on the basis of transaction value is correct or not, Supreme court in Cibatul Ltd vs. UOI 1978(22) ELT 302 (SC) have held t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion in the case Sujhan Instruments Vs. Commissioner of Central Excise, Chennai II [2019 (368) ELT 135 (Tri.-Chennai)] to set aside the demand as well as the penalties. The relevant paragraphs read as under:- 2.1 Brief facts are that the appellant M/s. Inova India (hereinafter referred to as M/s. Inova ) is engaged in the manufacture of Electronic Flushing System (EFS). During the visit by the officers of the Headquarters Preventive Unit, it was observed that M/s. Inova were manufacturing Electronic Flushing Systems bearing the brand name Parryware and were clearing the same on payment of duty. 2.2 On further enquiry, it appeared that M/s. Roca Bathroom Products Pvt. Ltd (appellant in Appeal No. E/529/2012- hereinafter referred to as M/s. Roca ) were supplying the major input viz. urinal casing to M/s. Inova on sale basis. M/s. Inova fixed the Electronic System in the urinal casing in order to provide automated function. The urinal casings with this automated function were then packed as a single unit per- carton box and dispatched to various depots of M/s. Roca on sale basis as per the purchase order. The price of the goods was arrived at by M/s. Inova by cost constructi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd arises out of the allegation that the appellant M/s. Inova has manufactured goods as a job worker on behalf of the principal manufacturer M/s Roca. It is an admitted fact, as seen from the Show Cause Notice as well as the impugned order, that M/s. Inova has procured the urinal casings from M/s Roca by transaction of purchase and sale. Merely because the goods manufactured by M/s. Inova bear the brand name of M/s. Roca, the Department has viewed the transaction as a manufacture done by a job worker on behalf of the principal manufacturer. 8. The very same issue was discussed by the Tribunal in the case of M/s. Sujhan Instruments (supra) wherein the Tribunal observed as under: 8.3 A perusal of the SCN No. 104/2009, dated 23-10-2009 reveals that department is inclined to treat Sujhan as a job worker of Honeywell primarily on the grounds that supplies of raw materials that required to be approved by the latter, quality control exercised by Honeywell, 99% of the finished goods are sold to the latter and that Honeywell's brand name and MRP stickers are used on the packing The Rule 10A has been inserted in the Central Excise Valuation (Determination of Price of Excisable Goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act between Sujhan and Honeywell is only a camouflage for job working. There is also no evidence put forth to indicate that apart from the value invoices by Sujhan to Honeywell there is an additional value component which is separately paid by the latter to the former or that there is any additional flow back of funds. This being the case, there is no reason on account of invoice value between Sujhan and Honeywell should not be treated as the transaction value under Section 4(1) (a) of the Central Excise Act, 1944. 8.6 While arriving at this conclusion, we draw sustenance from the ratio of the Tribunal's decision in Coromandal Paints 2010 (260) ELT 440 (Tn. Bang). In that case, the Coromandal Paints and SIPL had entered into agreement for manufacture and supply of paints, with all taxes to be paid on sale price by the latter. The agreement indicated that prices charged by the former are treated as sale to SIPL on which value Central Excise duty and sales tax was being discharged The Tribunal following the ratio already laid down in Gillette Diversified Operations Lid. v. Commissioner 2007 (217) ELT 551 (Tribunal) held that by merely indicating vendors of raw materials or by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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