TaxTMI 
TaxTMI 
2010 (10) TMI 369
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.... declaration about the cost of raw materials and job charges including job workers profit in respect of the goods manufactured on job work basis. 1.1 According to the Department, in respect of the goods manufactured on job work for M/s. Bansiwala Steel (P) Ltd., the assessable value of the goods was required to be determined under Rule 6(b)(i) of the Central Excise (Valuation) Rules, 1975 on the basis of price of like goods cleared by the appellant, as complete information for determining the assessable value of the finished goods on the basis of cost of raw material and the job-charges including job worker's profit was not available and since this was not done, duty amounting to Rs. 66,237/- has been short paid by the appellants in respect of the goods cleared to M/s. Bansiwala Steel (P) Ltd. during the period from 28-4-95 to 24-5-95. 1.2 In some cases, the goods manufactured by the Appellant on job work basis were being cleared by the merchant-manufacturers from the Appellant's factory itself. According to Department in such cases, the duty was to be paid on the sale price charged by the merchant-manufacturers from their customers, not on the cost of raw materials sup....
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....eptember, 1996 period when Section 11AB and Section 11AC were not there. 1.7 The present appeal has been filed against the above order of Commissioner of Central Excise (Appeals) challenging the upholding of duty demand and penalty under Rule 173Q(1) of the Central Excise Rules, 1944. Miscellaneous application No. E/MISC/77/09-Ex, has been filed for addition of some additional grounds. 2. Heard both the sides. 2.1 Shri Bipin Garg, Advocate, the learned Counsel for the Appellant made the following submissions :- (1) As per Hon'ble Supreme Court's judgment in the case of Ujagar Prints & Others v. Union of India & Others reported in 1989 (39) E.L.T. 493 (S.C.), duty on the goods manufactured on job work basis out of raw material supplied by the customers is to be paid on the "deemed factory gate price" of the goods, which is the cost of the raw materials plus job work charges including job worker's profit. The Appellant were paying duty on this basis only in respect of the job-work goods. (2) While the cost of raw materials (M.S. Ingots) includes the cost of freight, the job charges include the cutting and burning loss. Moreove....
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.... not include the cost of freight and burning losses and cutting losses in the value of raw materials. The cost of freight of M.S. Ingots was being separately recovered from the customers by issue of debit notes. In view of this, the duty demand has been correctly confirmed as the duty was payable on the price of the comparable goods. (2) As regards the 2nd component of duty demand of Rs. 76,739/- in respect of the job-work goods sold by the merchant-manufacturers from the Appellant's factory, duty has been correctly charged on the merchant-manufacturer's price as the loading charges recovered by the merchant-manufacturers from their customers has also to be added in the assessable value. (3) As regards the 3rd component of duty demand of Rs. 65,092/- in respect of rods manufactured on job work basis for traders dealing in agricultural implements, the assessable value has been correctly determined by cost construction method under Rule 6(b)(ii) of Central Excise (Valuation) Rules, 1975, as the Appellant had not filed any price declarations. 3. We have carefully considered the submissions from both the sides and perused the records. ....
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....n regarding freight and octroi expenses incurred. If this is so, this information should have been obtained and assessable value should have been redetermined by adding the freight and octroi expenses to the cost of inputs, as, as per the judgment of the Tribunal in the case of Reddy & Sons v. CCE, Jamshedpur reported in 2001 (137) E.L.T. 679, freight for transportation of raw materials to the job worker's factory is required to be added to the assessable value of the final products manufactured and, cleared from the job worker's premises. Once the full cost of raw material has been included in the assessable value, there is no necessity of including the burning loss. As regards the cutting loss, unless the cutting waste is retained by the job-worker, which would increase his job charges, there is no question of including the same in the assessable value. But there is no finding as to whether the cutting waste is retained or returned. In this case, the assessable value has been determined on the basis of the "comparable price of identical goods", which is not correct. Moreover, the order does not discuss as to how the goods, whose price has been adopted, are identical to the goods ....
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....llant that, in any case, longer limitation period is not available to the Department for demand of duty and the entire demand is time-barred as- (a) The Appellant had submitted RT-12 Returns regularly during the period of dispute, along with copies of job work challans from merchant-manufactures and also their invoices; and (b) The visit of the preventive officers to the Appellant's factory was on 16-8-96. Earlier, the central excise records of the Appellant had been checked twice by the Central Excise Audit Team and no objection had been raised. 8.1 We find that the above submissions have not been discussed by the Commissioner (Appeals) at all while holding that the Appellants are guilty of suppression of the relevant information. On the question as to what constitutes "suppression" for the purpose of invoking longer limitation period under proviso to Section 11A(l) of the Central Excise Act, 1944, the Apex Court in Pushpam Pharmaceuticals Company v. CCE, Bombay reported in 1995 (78) E.L.T. 401 (S.C.); CCE v. Chemphar Drugs & Liniments reported in 1989 (40) E.L.T. 276 (S.C.) and Continental Foundation Joint Venture v. CCE, Ch....