2009 (11) TMI 764

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....vision of Mahindra & Mahindra Ltd. (MML). Base vehicles were cleared from manufacturing unit in Nasik on payment of duty on the basis of value indicated in the purchase order. The bullet proofing was done by a job worker/sub-contractor and thereafter vehicles were supplied to J & K Police. Revenue took a stand that respondent (manufacturing unit in Nasik) should have discharged duty on the total price of bullet proof vehicles and consequently proceedings were initiated by issuance of two show-cause notices on 7-2-2003 and 2-7-2003 proposing recovery of more than Rs. 1.21 crores. The Asstt. Commissioner vide Order-in-Original No. 396/2003 dated 30-9-03 confirmed duty demand of Rs. 92,96,308/- with interest as applicable and he also imposed p....

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....d and therefore cost of bullet proofing is also to be added. 3. Ld. Counsel for the respondent submitted that in this case respondent has assessed base vehicle before removal; it is settled law that goods have to be assessed in the form in which they are removed after assessment; what the respondent removed was the base vehicle. Since what was removed was the base vehicle, the value adopted was that of the base vehicle only. He submitted that bullet proofing was a separate and distinct activity and was undertaken by a sub-contractor in Delhi. If the process amounted to manufacture, proper course was to demand duty from the sub-contractor. He also submitted that Chapter Note 6 of Chapter XV of Schedule to the Central Excise Tariff Act is no....

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....from the provisions of Sec. 4 of the Act which requires determination of value at the place of removal. Naturally, place of removal has to be one place. What follows from the provisions relating to registration is that each factory or premises of a manufacturer is required to be registered except those who are covered by exemption. 6. In terms of the legal provisions discussed above, it is quite clear that goods have to be assessed at the place of removal and if the value cannot be determined under main provisions of Section 4(1)(a) of the Act, rules for valuation have to be resorted. 7. A hypothetical example makes the position clear. Let us take an assessee who has 4 divisions in different parts of the country, each making plastic granu....

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....urt judgment in the case of M/s. Siddharth Tubes Ltd. [2000 (115) E.L.T. 32 (S.C.)] and in J.G. case [1998 (97) E.L.T. 5 (S.C.)] Ministry of Law was requested to advise as regards to duty liability on value addition where the duty paid goods are cleared to other units for carrying further processes not amounting to manufacture and the other unit belongs to same group or is that of the job workers who merely processes the goods without owning them and collects job charges and return or cleared the goods on behalf of the supplier of the goods. The Law Ministry has advised that the judgment of the Siddharth Tubes Ltd. does not enable the department to charge duty on value addition outside the factory of clearance on account of certain processe....