2000 (8) TMI 322

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....nd is engaged in the manufacture of goods like skimmed milk powder, whole milk powder, infant milk powder, pure ghee etc. The other appellant M/s. J. Ice Creams Pvt. Ltd. is a Company incorporated in 1980 under the Companies Act and engaged in the business of manufacturing ice creams. At the time M/s. J. Ice Creams started the manufacture of ice cream, that product was exempt from Central Excise Duty. In 1-6-1981 M/s. J. Ice Creams got into an agreement with M/s. Milk Food Ltd. for manufacture and supply of ice cream, according to the specifications of the buyer. The present proceedings started with the issue of show-cause notice dated 9-8-1995. This notice proposed to demand duty from both the appellants, treating both the units as related....

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....is even otherwise. In the instant case both the companies were limited companies and they were in existence and in production even before the agreement between both the parties. The agreement is on principal to principal basis and therefore, there is no justification for treating one as the agent of the other. He also submitted that, in any event, the valuation adopted by the Commissioner is completely erroneous. Rule 6 (b)(i) of the Central Excise Rules related to valuation of goods which are captively consumed by a manufacturer. In the present case goods were not being captively consumed but were being transferred to the company who had entrusted their production on job work basis. The ld. Counsel submitted that the law relating to valuat....