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TMI Blog2024 (8) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... s when cleared to the ultimate consumers. In the case in hand, it is found that provisions of Rule 10A (i) and (ii) does not apply as recorded correctly by the first appellate authority. Provisions of Rule 10A (iii) gets attracted as 10A(i) or (ii) does not apply. The said provision (iii) very clearly mandate that in a case not covered under clause (i) or (ii), the provisions of foregoing rules, wherever applicable shall mutatis and mutandis apply for determination of value of the excisable goods. The provisions under Rule 10 A of Central Excise Valuation (Determination of Price of excisable goods), Rules 2000 has to be applied. In the present case, the Cenvated raw materials have been supplied free of cost to the appellant by the principal manufacturer. However, while clearing the wiring harness, the appellant has not included the value of these free materials in the assessable value - The cost of the intermediate product has been included for arriving at the assessable value by the principal manufacturer who has availed the credit on the free inputs supplied. The principal manufacturer would be eligible to avail credit of duty paid on intermediate product (wiring harness) by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... August 2010 to July 2011 (duty Rs.1,10,205/-) was issued to the appellant proposing to demand the duty along with interest and for imposing penalties. After due process of law, the original authority confirmed the demand, interest and imposed penalties. On appeal, the Commissioner (Appeals) upheld the same. Hence, these appeals. 4. The Ld. Counsel G. Natarajan, appeared and argued for the appellant. It is submitted that the appellant manufactured wiring harness by using free materials supplied by the principal manufacturer and also adding their own materials. Though the wiring harness was cleared to the principal manufacturer on payment of central excise duty. The appellant is entitled for exemption from payment of duty in terms of Notification No.214/86. For this reason the demand cannot sustain. All conditions prescribed in the said notification are compiled in this case. Though it is alleged that the appellant has not filed the declaration as required by the said notification, it is only procedural in nature. The Tribunal in the case of Salem Weldmesh Vs CCE 2007 (218) ELT 405 (Tribunal Chennai) has held that the demand of duty on the job worker cannot sustain when the principal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e grounds of limitation also. It is submitted that the demand from April 2007 to January 2010 is raised by way of invocation of extended period. It is alleged by the department that the appellant has suppressed facts with intention to evade payment of duty. The entire figures have been taken from the accounts maintained by the appellant. The appellant has discharged the duty on the assessable value arrived at by them without including the value of free supplies on bona fide belief that these free supplies are not to be included. The issue is purely interpretational in nature. There were litigations pending before various forums as to the method of arriving at the assessable value of job work goods when the principal manufacturer is also discharging central excise duty. There was confusion with regard to the inclusion of the value of free supplies to arrive at the assessable value. Further, the entire situation is revenue neutral. Even if the appellant paid duty, the principal manufacturer would be eligible for credit. The decision in the case of Jay Yuhim Ltd., Vs. Commissioner 2001 (137) ELT 1098 was referred to by the Ld. Counsel for appellant. The decision of the Hon ble Apex Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oval of goods from the factory of job worker, where the principal manufacturer and the 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hus construed that price is not the sole consideration for sale of the wiring harness by the Job Worker to the principal manufacturer. The value of the free materials has not been included in the assessable value while clearing the goods to the principal manufacturer, even though such goods are captively consumed by the principal manufacturer. It is to be noted that appellant (job worker) has not availed Cenvat on the inputs received free of cost. The cost of the intermediate product has been included for arriving at the assessable value by the principal manufacturer who has availed the credit on the free inputs supplied. The principal manufacturer would be eligible to avail credit of duty paid on intermediate product (wiring harness) by the appellant. The whole situation is revenue neutral. 13. The show cause notice for the period April 2007 to July 2010 is issued on 18.02.2011 and the show cause notice for the period August 2010 to July 2011 is issued on 25.08.2011. Therefore, part of the demand falls within the extended period. We have to say that the issue of valuation of job worked goods was in controversy for a long time. The Hon ble Supreme Court in the case of Ujagar Print ..... X X X X Extracts X X X X X X X X Extracts X X X X
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