2003 (7) TMI 215 - AT - Central Excise

Appellate Tribunal rules in favor of appellants on differential duty for 'Wool Tops' job work.

TARA INDUSTRIES LTD. Versus COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH

The Appellate Tribunal CESTAT, New Delhi ruled in favor of the appellants, setting aside the orders demanding differential duty for 'Wool Tops' ... Valuation (Central Excise) - Job work Issues Involved: The method of valuation of goods produced on job work basis.Summary:The appeals raised a common question regarding the valuation of 'Wool Tops' manufactured on job work basis. The appellants calculated the assessable value based on the cost of raw material and job work charges, paying duty accordingly. However, differential duty was demanded under Rule 8 of the Central Excise Valuation Rules, 2000. The rule pertains to goods not sold but used for consumption or in production of other articles, which was not applicable in this case as the goods were not being consumed by the assessee. The appellants argued that the valuation method contradicted a circular by the Central Board of Excise and Customs, which clarified the valuation principles for goods manufactured on job work basis. The circular emphasized that goods produced on job work basis should be valued as per the Apex Court's decisions even after 1-7-2000, in this case, following the judgment in Ujagar Prints Ltd. The impugned orders were found to be in conflict with the valuation rules and the circular, leading to the appeals being allowed and the orders set aside.In conclusion, the Appellate Tribunal CESTAT, New Delhi ruled in favor of the appellants, emphasizing the need to value goods produced on job work basis in accordance with the principles established by the Apex Court, as reiterated in the circular by the Central Board of Excise and Customs. The impugned orders demanding differential duty were set aside, highlighting the consistent valuation approach required for goods manufactured on job work basis both before and after 1-7-2000.