TaxTMI 
TaxTMI 
2011 (2) TMI 636
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....eading 3302.90 to their contract manufacturers discharging duty on the value arrived on basis of cost construction method, Show-cause notices were issued alleging that the respondent had under valued the clearances to their contract manufacturers in order to evade duty. The show-cause notices covered the period from May 2000 to March 2003. It was also alleged in the show-cause notices that the respondents had cleared the aromatic chemicals to their units at Aurangabad and Nepal,during the relevant period in question by under stating the overheads by not including various other cost.This according to the Revenue has resulted in evasion of Central Excise duty. The respondent herein contested the show-cause notices before the learned Com....
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....the one at which goods are sold to the public'. It is the submission that the assessee has not produced any documents/details to consider the price declared by them as a normal price. It is also the submission that the price at which the respondent sold the aromatic compounds to the contract manufacturers could not be normal price, as it may be influenced, by the fact, that the respondent purchases the entire production of Tooth Paste/Tooth Powder from the contract manufacturers; it would indicate that the price charged by the respondent on the aromatic compounds cleared to contract manufacturers is influenced. It is also the submission that the price is not the sole consideration due to the reason that respondent purchases the entire....
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....turer is principal to principal basis, valuation of the goods manufactured on job work basis for Central Excise duty should be carried out on the cost of material. It is the submission that the intermediate products; the price of which is under dispute is sold to the contract manufacturers and sister units only and is not otherwise sold to any other independent buyer and nor there is any wholesale market for it. It is the submission that therefore, the price of the intermediate products is influenced by other consideration i.e. buy back of entire products manufactured out of these intermediate products by the respondent. He would rely upon the following decisions : (i) Pawan Biscuits Co. (Pvt.) Ltd. Vs. Collector of Central Excise, ....
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....ries Ltd. Vs. Commissioner of C. Ex. Raigad 2007 (209) E.L.T. 185 (Tri.LB) would also cover the assessee's case inasmuch as the Larger Bench has held if there is a sale of production to independent buyers, the value adopted for such clearance should be assessable value. He would also rely upon the judgement of the Tribunal in the case of Sai Mirra Innopharam P. Ltd. (SIMPL) Vs. Commissioner of C. Ex. Chennai-II & IV 2007 (215) E.L.T. 561 (Tri.Chennai) for the preposition that control of buyer-company would not mean that they are related and suggestion on sourcing of raw material could not be additional consideration. He would also rely upon the decision of the Hon'ble Supreme Court in the case of Union of....
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....e as per the provisions of Section 4(A) of the Central Excise Act 1944. On this factual matrix, the findings of the adjudicating authority are very vital. The said findings recorded at paragraph 27, are reproduced. "Thus it has already been examined and established that out of the seven buyers five buyers are not related persons of the assessee. The show cause notices have not brought out any fresh facts to allege that material circumstances have changed in nay manner subsequently, to hold that these buyers were related persons of the assessee. Although, all the above judgments pertain to the period prior to 1.7.2000 i.e. prior to introduction of new Section 4 and Central Excise Valuation Rules,....
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.... say the least in presumption any basis. In this case the aromatic compounds cleared from the factory premises of the respondents were to independent manufacturers on an invoice under the provisions of Central Excise Act, and the Rules made thereunder. Such invoices are not disputed by the lower authorities and the price charged is only sought to be contested, that also without any cogent evidence. We find that the sale of aromatic compounds is for consumption and it need not be for sale to public. The contract manufacturers purchasing aromatic compounds from the respondent un-disputedly consume the same in the manufacture of the final product like tooth paste and tooth powder, if that be so, then it cannot be disputed tha....