2006 (8) TMI 352

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.... MCL had cleared the yarn under Rule 8 of the Central Excise Valuation Rules 2000 by adopting 110% of the cost of production to the appellant. The point at issue is, on completion of the job work how the assessable value of the finished products should be determined by the appellant. The appellant determined the value on the basis of the decision of the Apex Court rendered in the case of Ujagar Prints [1989 (39) E.L.T. 493 (S.C.)] followed by Board's Circular dated 19-2-2002. According to the appellant, his assessable value would the cost of the materials received from MCL plus the processing charges incurred by him. But, the Revenue contended that the appellant should take 110% of the cost of the materials cleared by MCL in view of the fac....

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....oner (A) committed a grave error in distinguishing the above case law by holding that ".....dispute in those cases in regarding the determination of value of the goods manufactured on job work basis and none of the cases deals with the determination of the cost of materials used in the manufacture of goods on job work basis." (iii)   The findings of the Commissioner (A) are not correct as seen in para 2 of the case law cited supra. ".....The present appeal is about the valuation of fabrics processed for M/s. BSL Ltd. During the period July 2002 to December 2002. The appellants arrived at the assessable value by adding their job charges to the cost of the fabrics received. Under the impugned order it has been held that the value....

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.... manufacture of the said goods. (vi)   Neither the show cause notice nor the order of the lower authority nor the impugned order explains as to how the "assessable value" of inputs supplied by M/s. Madura Coats Pvt. Ltd. which was determined by adding 10% to the 'cost of production' of the said yarn as per Rule 8 of C.E. Valuation Rules 2000 for the purpose of payment of duty at their end, would indicate the actual 'cost of production' of the said yarn. (vii)  Since the duty demand is not sustainable, levy of penalty is not justified. 5. The learned Departmental Representative reiterated the impugned Order-in-Appeal. 6. We have gone through the records of the case carefully. The appellant is a job worker....