2024 (10) TMI 1250 - AT - Central Excise

Appeals allowed on differential duty demand for job work goods under Ujjagar Prints principle over Rule 8 valuation

CESTAT Bangalore allowed appeals regarding differential duty demand on job work goods. The tribunal held that assessable value for goods manufactured on ... Demand of Differential duty - determination of assessable value - goods manufactured on job work basis by the appellant which were cleared to the principal manufacturer who consumes it captively - determination on the basis of principle laid down in the case of Ujjagar Prints or Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - HELD THAT:- The issue is no more res integra in view of the ratio laid down by the coordinate Bench of this Tribunal in the case of COSMOS CONDUCTORS PVT LTD VERSUS COMMISSIONER OF C.E., BANGALORE-II AND RAMACHANDRA M.G., MANAGER M/S COSMOS CONDUCTORS PVT LTD VERSUS COMMISSIONER OF C.E., BANGALORE-II [2023 (11) TMI 214 - CESTAT BANGALORE] and upheld by the Hon’ble Supreme Court in the case of COMMNR. OF CENTRAL EXCISE, PUNE VERSUS M/S. MAHINDRA UGINE STEEL CO. LTD. [2015 (4) TMI 351 - SUPREME COURT]. This Tribunal in Cosmo Conductors Pvt. Ltd.’s case observed that 'Even though the aforesaid judgement was delivered prior to insertion of Rule 10A, however, there is no change in the wordings of Rule 8 after 01.03.2007, and the facts of the present case do not fall either under sub-rule (i) or sub-rule (ii) of Rule 10A of Central Excise Valuation Rules, 2000.' There are no merit in the impugned order in applying Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. Consequently, assessable value of the job-worked goods be determined following the principle laid down in UJAGAR PRINTS ETC. ETC. VERSUS UNION OF INDIA & OTHERS [1989 (1) TMI 124 - SUPREME COURT] when the principal manufacturer (raw material supplier) uses it captively even after insertion of Rule 10A to the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 w.e.f. 01.04.2007. The impugned orders are set aside and the appeals are allowed. Issues:Determining the assessable value of job-worked goods under Central Excise Valuation Rules, 2000 - Applicability of Rule 8 vs. Ujagar Prints case.Detailed Analysis:Issue 1: Determining Assessable ValueThe case involved appeals against Orders-in-Appeal passed by the Commissioner of Central Excise(Appeals), Bangalore regarding the assessable value of job-worked goods. The appellants, engaged in manufacturing transformers, undertook job work for another company. The Department raised objections to the method of assessment used by the appellants, proposing to demand differential duty based on Rule 8 of the Central Excise Valuation Rules, 2000. The key issue was whether the assessable value should be determined based on the Ujagar Prints case formula or Rule 8.Analysis: The Tribunal considered the precedent set by the Cosmo Conductors Pvt. Ltd. case and the subsequent Supreme Court judgment in CCE, Pune Vs. Mahindra Ugine Steel Co. Ltd. The Tribunal noted that Rule 10A, effective from 01.04.2007, was applicable to the case. However, based on previous judgments, it was concluded that Rule 8 was not applicable to the present scenario. The Tribunal emphasized that the assessable value of job-worked goods should be determined following the principle laid down in the Ujagar Prints case, even after the insertion of Rule 10A.Issue 2: Precedent and Interpretation of RulesThe Tribunal referenced the Roalstar Pvt Ltd case and the subsequent Supreme Court judgment to support the decision. The Tribunal highlighted that Rule 8 did not apply to the facts of the case, and Rule 11, as the residuary provision, was deemed applicable for determining the value of excisable goods not covered under any other rule.Analysis: By analyzing previous judgments and interpreting the Central Excise Valuation Rules, the Tribunal concluded that Rule 8 was not suitable for the current situation. Rule 11 was deemed applicable as the residual provision for determining the value of goods. The Tribunal's decision was supported by the interpretation of relevant rules and precedents, leading to the setting aside of the impugned orders and allowing the appeals with consequential relief.In summary, the Tribunal's decision focused on the proper application of Central Excise Valuation Rules, emphasizing the precedence of specific cases and the interpretation of relevant rules to determine the assessable value of job-worked goods. The judgment clarified the applicability of Rule 8 versus the Ujagar Prints case formula, providing a comprehensive analysis based on legal principles and past decisions.