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of <h1>Appellate Tribunal rules against Department's attempt to add notional profit margin, upholding manufacturer's included profit.</h1> <h3>COMMISSIONER OF C. EX., NAGPUR Versus SUNRISE STRUCTURALS & ENGG. PVT. LTD.</h3> The Appellate Tribunal CEGAT, Mumbai, dismissed the Department's appeal regarding the assessable value of goods received by a manufacturer. The Tribunal ... Valuation - Job work - Margin of profit Issues involved: Interpretation of assessable value for goods received by manufacturer, inclusion of profit margin, distinction between manufacturing profit and manufacturer's profit.In the present case, the Appellate Tribunal CEGAT, Mumbai, addressed the issue of assessable value of goods received by a manufacturer, specifically focusing on the inclusion of a profit margin. The Collector (Appeals) accepted the appellant's contention that the Department could not add a 10% notional margin of profit to the assessable value, as the appellant had already included their profit. The Tribunal referred to the Supreme Court's decision in Ujagar Prints v. Union of India, 1989, to support this stance, ultimately leading to the Department's appeal.Regarding the grounds of appeal, the Departmental Representative argued that the net profit of the job worker, not the manufacturing profit, should have been added to the value of the goods. The representative emphasized the distinction between manufacturing profit and the profit accrued to the manufacturer, asserting that the former should be considered in the assessment.The Tribunal acknowledged the Supreme Court's clarificatory order, which outlined the components of the value for assessing goods handled by a job worker. While the order mentioned the value of raw material, job work, manufacturing profit, and manufacturing expenses, the Tribunal noted that the notice in this case specifically referred to adding the profit of the job worker. Therefore, any inclusion beyond these specified elements would exceed the notice's scope and be impermissible. Since the manufacturer's profit margin had already been accounted for in the assessable value, the Tribunal declined to intervene, affirming that it should not be added again.In conclusion, the Tribunal dismissed the appeal, maintaining the decision that the Department could not add a notional profit margin to the assessable value of the goods received by the manufacturer, as the manufacturer's profit had already been considered in the assessment.
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