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TMI Blog2004 (6) TMI 214X X X X Extracts X X X X X X X X Extracts X X X X ..... cs processed by them as processing is treated as manufacture. The duty being on ad valorem basis, payment of duty involves valuation of the processed fabrics. The law on valuation remains settled by the decision of the Apex Court in the case of Ujagar Prints Etc. Etc. v. Union of India Others - 1989 (39) E.L.T. 493 (S.C.) wherein the Apex Court held that the value of the processed fabric consists of the value of the fabric received, the processing charges and the profit of the processor. The appellant has been following this principle while discharging duty on the fabrics processed by it. It has several clients. The present appeal is about the valuation of fabrics processed for M/s. BSL Ltd. during the period July 2002 to December 2002. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. During the hearing of the case, learned Counsel for the appellant pointed out that this distinction between cost and value is made clear by the Apex Court in the Pawan Biscuits Co. (Pvt.) Ltd. (supra) judgment. The learned Counsel has referred to Para 16 of the judgment in this case. That para reads as under :- "16. The present case is similar to Ujagar Prints case. In Ujagar Prints case, it was the grey cloth which was given to the processor whereas in the present case it was the raw material for the manufacture of biscuits given to the appellant. After the biscuits are made, they are given back to or are delivered under the instructions of Britannia. The appellant was entitled to receive processing charges which include its expense ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lusion is contrary to valuation principles. 6. We have perused the records and have considered the submissions made by both sides. We find merit in the appellants' submission that assessable value for processed fabric is to be arrived by adding the processing charges and processing profit to the cost of the grey fabric supplied. This position is clear from the observation of the Apex Court in the case of Pawan Biscuits Co. (Pvt.) Ltd. "the cost of raw material supplied by Britannia will have to be included in addition to the appellants manufacturing costs and profit of raw material". (Emphasis supplied). Treating Central Excise assessable value as equivalent to cost of goods evidently creates problems. In many cases like MRP or tariff val ..... X X X X Extracts X X X X X X X X Extracts X X X X
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