TaxTMI 
TaxTMI 
2004 (10) TMI 483
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....erms of the judgment rendered by the Tribunal in the case of Gemini Dyeing & Printing Mills Ltd. v. CCE, Bangalore - 1997 (91) E.L.T. 195 (Tribunal) wherein it was clearly laid down that the value of the shrunk material alone is required to be taken for assessment. The findings recorded by the Tribunal in Paras 4 and 6 to 9 in Gemini Dyeing & Printing Mills Ltd. is re-produced herein below : 5. In a rejoinder, the learned Consultant stated that if that is the position he could not have confirmed the duty demand made by the Assistant Collector. 6. We have considered the submissions. In order to appreciate the arguments, we reproduce Para 8 of the impugned order as under - "As already stated in the preceding para, the price at which he is selling the goods must be the value of the grey cloth or fabric + the value of job work done + the manufacturing profit and the manufacturing expenses. It is thus important to note that on the ground of shrinkage, no deduction in the value of grey fabric is permissible, for the simple reason that the value is determined in terms of Section 4 of the Act. In brief, the value shall include the processor's expenses, cost and charges + profit. T....
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.... learned Member (J) or it may be remanded to the original authority as per the terms contained in the order of the learned Member (T)." 19. It is not disputed before me by either party that the issue arising in this case has to be decided within the parameters provided by the three decisions of the Supreme Court in Ujagar Prints, namely, 1987 (27) E.L.T. 567, 1988 (38) E.L.T. 535 and 1989 (39) E.L.T. 493. Both sides are relying on the above decisions in support of its respective contentions. Therefore, one has to examine the ratio of the above three decisions in the matter of arriving at the assessable value of the grey fabrics at the time of return of the goods after completing the process. The questions that came up for consideration of a Bench of two Judges of the Supreme Court in 1987 (27) E.L.T. 567 were - whether the process of bleaching, dyeing, printing, (1) mercerizing etc. carried on by a processor on job work basis in respect of grey fabrics and man-made fabrics belonging to the customer and entrusted him for processing amount to 'manufacture' within the meaning of the Central Excises & Salt Act as it stood prior to its amendment by the Central Excises and Sal....
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....oth in the hands of processor plus the value of the job work done plus manufacturing profit and manufacturing expenses which will either be included in the price at the factory gate or deemed to be the price at the factory gate for its processed fabric. The factory gate means the deemed factory gate as if the processed fabric was sold by the processor. The illustration given in the reference order 1987 (27) E.L.T. 567 is quoted this clarificatory order which reads as follows :-   "If the value of the grey cloth in the hands of the processor is Rs. 20/- and the value of the job work done is Rs. 5/- and the manufacturing expenses and expenses for the processing be Rs. 5/-, then in such a case the value would be Rs. 30/-, being the value of the grey cloth plus the value of the job work done plus manufacturing profit and expenses. That would be correct assessable value." In Para 2 of the order it was further observed as follows :-   "If the trader, who entrusts cotton or man-made fabric to the processor for processing on job work basis, would give a declaration to the processor as to what would be the price at which he would be selling the processed goods i....
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....sessable value. 23. Since the legal position regarding the computation of assessable value has been made clear by the Supreme Court much before the period in question, it has to be taken that the assessee with full knowledge of its obligation to pay duty on the deemed sale at its factory gate was guilty of wilful suppression of the fact that there would be shrinkage in the course of process and that it has calculated the assessable value without taking into account such shrinkage with intent to evade Central Excise duty. The authorities are, therefore, justified in invoking the longer period of limitation. 24. I agree with the order passed by the Member (Technical) that the case has to be remanded to the original authority to work out the exact amount of differential duty liability on the appellant and the amount of penalty to be imposed on them. Sd/- (Justice K.K. Usha) President Dated : 18-3-2002 FINAL ORDER 25. In view of the majority opinion, the appeal is remanded to the original authority to work out the exact amount of differential duty liability on the appellants and the amount of penalty to be imposed on them. Sd/- (K.K. Bhatia) M....