TaxTMI 
TaxTMI 
2010 (6) TMI 383
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Original Authority confirming differential duty of Rs. 1,60,747/- along with applicable interest against the appellant and imposing equal amount of penalty under Section 11AC of the Central Excise Act, 1944 (the Act). 2. The facts of the case are that the appellants manufactured and cleared cocoa butter and cocoa powder on job work basis for M/s. Cadbury India Ltd. (CIL) during the period 1-4-1999 to 31-3-2002. They had paid excise duty on value determined following the formula approved by the Apex Court in the case of Ujagar Prints Etc. Etc. v. Union of India & Others [1989 (39) E.L.T. 493 (S.C.)]. Value adopted was raw material cost plus job charges including profit. In the instant case, the appellants received cocoa beans from CI....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed by the Apex Court as reported in 2000 (115) E.L.T. A77 (S.C.). 3. In the appeal filed before the Tribunal, it is submitted that the cocoa husk was a waste material and they had discharged the applicable duty on the cocoa butter and cocoa powder on the value computed following the ratio of the Apex Court's judgment in the case of Ujagar Prints (cited supra). In computing the relevant value, they had aggregated the value of raw material, processing charges and the profit of the job worker. The value of the husk was included in the value considered for payment of duty. The cost of cocoa beans included also cost of husk. There was no short levy. The period of dispute was from 1-4-1999 to 31-3-2002. However, both the authorities have w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d that the price of scrap retained by the job worker was not to be included as additional consideration in the value of goods manufactured on job work basis. The Tribunal held to the same effect in Hindustan Engineering & Industries Ltd. v. CCE, Kolkata [2002 (144) E.L.T. 418 (Tri. - Calcutta)]. In that case, Railways had supplied rails free of cost for the manufacture of railway points and crossing and the manufacturer had retained and sold the waste and scrap generated out of the raw materials supplied. The Tribunal held that since the value of the entire gross quantity of the rails including the quantity which became scrap had already been included in the assessable value, the sale proceeds of the scrap were not to be included in the ass....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... was available as Cenvat credit to the principal manufacturer. 6. In the Lawkim Ltd. case (supra), the Tribunal followed the ratio of the International Auto Ltd. case. In the Lawkim Ltd. case, the appellants had not included the cost of materials received free of cost from the principal manufacturer and the proceeds of scrap generated in the value of the goods manufactured and cleared to the principal manufacturer. The liability fastened on the appellant on the above ground was vacated following the ratio of the International Auto Ltd. case. 7. We have also heard the learned SDR who relies on the judgment of the Apex Court in Jay Engineering Works Ltd. v. Commissioner [2000 (115) E.L.T. A77 (S.C.] which had dismissed an appeal....
X X X X Extracts X X X X
X X X X Extracts X X X X
....case (supra), held that the question of adding the value of scrap in the value of the intermediate product cleared by a job worker to the principal manufacturer did not arise. We find that in the Lawkim Ltd. case, the decision of the Tribunal was to the same effect. We note that the Apex Court, in the International Auto Ltd. case, held as follows in paras 6 and 7 of the judgment. "6. We are of the view that the submission of the appellant is correct. The Tribunal appears to have been confused between the manufacture of the final product, namely, excavators and the manufacture of the intermediate product, namely, the floor plate assemblies. The scheme of Modvat permits the person who clears the ultimate final product to take the benef....