TaxTMI 
TaxTMI 
2004 (3) TMI 454
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....l duty of Rs. 2,18,603/- under Section 11A of Central Excise Act. He also demanded interest at the rate of 20% per annum under Section 11AB of the Act. He did not impose any penalty on the appellants. 2. The appellants are the manufacturers of yarn falling under chapter Heading No. 55 of CETA. They entered into on agreement with M/s. Anantpur Cotton Mills, Tadipatri (a job worker) for manufacture of cotton yarn of different counts. As per condition of the agreement, the appellants declared the sale price of the product to the department for the purpose of valuation of goods at the time of clearing the said goods. They also stated that in case any difference in the declared price and the actual sale price was noticed, the appellants ....
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.... notices were issued to the appellants by the Superintendent demanding differential duty to the tune of Rs. 13,60,449/- for the period May, 97 to September, 97, October, 97 to March, 98, April, 98 to July, 1998, on the basis that the appellants instead of going to the method of comparable goods for payment of excise duty, adopted cost-production approach for determination of assessable value, which is defective and resulted in lowering the assessable value. The department alleged that goods were removed to depots on stock transfer basis without the knowledge of the department. Hence, there is suppression of facts. Reduction in landing cost of raw material, was also alleged in the SCNs. The appellants replied to the said SCNs, on 23-3-98, 9-....
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....ame was based on the cost of raw material and the job-charges. He also placed reliance on the following case laws : 1. Ultra Lubricant (India) (P) Ltd. v. CCE, Mumbai - 2002 (150) E.L.T. 580 (Trib.) 2. Marcandy Prasad Radhakrishna Prasad Pvt. Ltd. v. CCE, Calcutta-II - 1998 (102) E.L.T. 705 (Trib.) 3. Hyderabad Cylinders Pvt. Ltd. v. CCE, Hyderabad - 2003 (157) E.L.T. 466 (Trib.) 4. M.R. Plastics Polymers (P) Ltd. v. CCE, Hyderabad - 2000 (124) E.L.T. 934 (Trib.) 5. In the end, the appellan....
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....oods, manufactured on job-work basis is concerned. 6. The Hon'ble Tribunal in case of Ultra Lubricants P. Ltd. v. CCE, Mumbai, held that "goods manufactured not to be assessed at resale price of the raw material supplier. Assessment determined on cost of raw materials, labour charges and profit in accordance with Ujagar Prints [(1989 (39) E.L.T. 493 (S.C.)] upheld". 7. The Hon'ble Tribunal in the case of Hyderabad Cylinders (P) Ltd. v. CCE, Hyderabad reported in 2003 (157) E.L.T. 466 (Trib. - Bang.), has held - "Job work valuation cannot be decided by comparison with goods produced on own account and sale value of scrap not to be included once again, matter remanded for determination of duty after considering costing data....
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....k were earlier assessed under the residuary Rule 7 of the erstwhile Valuation Rules of 1975 read with Rule 6(b) read with the Apex Court decisions referred to above." 9. Respectfully following the ratio of the decision cited above and the contents of the Board's Circular dated 19-1-2002, I find that the appellants have correctly followed the law regarding valuation of goods manufactured on job-work basis. The contention of the department that costing method is not applicable and the valuation of the goods should be done on the basis of price of comparable goods (minus the colouring charges) is contrary to the legal provisions. The said contention is not sustainable. The adjudicating authority has also not agreed with the contentions....
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.... department. Therefore, the demand of differential duty confirmed on the basis of sale prices at depots on the basis of stray cases involving higher price, is not sustainable. Job-work valuation cannot be decided on the basis of higher sale price charged at depots in a few cases. There is no legal basis for adopting this course of action by the department. I, therefore, hold that the order is not legal and proper and the same is liable to be set aside. I find that M/s. Bhoruka Textiles Ltd., Dharwad, the appellants in the present appeal are not registered with Central Excise Department at Ananthapur Division. If any duty was to be demanded from them, the jurisdictional officer had to demand the same. In the instant case the correct procedur....