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TMI Blog2024 (2) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... al discipline, the decision rendered in the appellant s own case is followed and the duty demand or penalties imposed on M/s. Texcom, cannot be sustained and require to be set aside. So also, the penalties imposed on M/s. Roca cannot be sustained and requires to be set aside. The impugned orders are set aside. The appeals are allowed. - MS. SULEKHA BEEVI C.S., MEMBER (JUDICIAL) AND MR. VASA SESHAGIRI RAO, MEMBER (TECHNICAL) Mr. M.N. Bharathi, Advocate (Sl.No.1,2) Mr. R. Parthasarathy, Consultant (Sl.No.3,4) For the Appellant Shri Harendra Singh Pal, Asst. Commissioner (A.R ) [S.No.1,2] Shri M. Selvakumar, Asst. Commissioner (A.R) [Sl.No.3,4] 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 are that the appellants viz. M/s. Tescom Electronics Pvt. Ltd. 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Roca Bathroom alleging that they have connived along with M/s. Tescom Electronics Pvt. Ltd. (appellants in the above appeals) and thus proposing to impose penalties. Appeal Nos. E/40706/2018 E/41698/2019 have been filed by M/s Roca Bathroom Products (P) Ltd. aggrieved by the penalties imposed. 6. The Ld. Counsel Mr. M.N. Bharathi appeared and argued for the appellant M/s.Roca. It is submitted that the Department has raised the duty demand against M/s. Tescom 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.Tescom and therefore M/s.Tescom cannot be said to be a job worker of M/s. Roca. The Ld. counsel adverted to the definition of job work which reads as under:- Job work means processing or working upon a material or semi- finished goods supplied to the job worker so as to complete a part or whole of the process resulting in the manufacture or finishing of an article or any operation which is essential for aforesaid process and the expression ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te 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 that even if the goods are produced with customers brand name and under his quality control it does not mean that customer is manufacturer. The quality testing and control by the customer, affixing of his brand and monitoring of activity cannot render the customer as manufacturer. 6.8 The Ld. Counsel submitted that the issue stands squarel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctronic 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 construction method with some profit margin. This cost construction price was subjected to negotiation with M/s. Roca to arrive at the agreed price, on which the duty was paid. All these activities were governed by the conditions laid down in the agreement entered between M/s. Inova and M/s. Roca (previously known as Parryware Division - M/s. EID Parry ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Goods) Rules, w.e.f. 1-4-2007. As per this rule, the value at which principal manufacturer sells his goods will be the basis for determining the transaction value for payment of Central Excise duty by the job worker. For the purpose of this rule, the job worker is defined as a person engaged in the manufacturer or production of goods on behalf of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 Coromandel Paints 2010 (260) ELT 440 (Tn. Bang). In that case, the Coromandel 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 giving advance for procuring raw material or even installing equipment given by SIPL would not render Coromandel as a job worker. 9. In view of the findings and conclusions herein above and following the ratio already laid down by Tribunal in Coromandel Paints Ltd (supra), Impugned Order No 20/2010, dated 3-9-2010 (relating to Appeals E/810 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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