TaxTMI 
TaxTMI 
TaxTMI 
2015 (1) TMI 764
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.... Hyundai and other services. M/s. Durr India identified the appellants herein for the performance of the job. 1.2 The appellants are engaged in the manufacture of fabrication of heavy engineering items viz. iron and steel structures, part of cement plant machineries, ESP components etc. classifiable under Chapter 73 and 84 of the Schedule to the Central Excise Tariff Act, 1985. 1.3 The appellants entered into a contract with M/s. Mahindra and M/s. Hyundai for fabrication work and assistance in erection, in stallation and commissioning of the plant at their premises. The appellants executed the contracts on job work basis and paid the duty on cost of raw materials and conversion charges as per the decision of the Hon'ble Supreme Court in the case of Ujagar Paints Vs. Union of India 1998 (38) ELT 585 (SC). The fabrication job would be done as per the drawings of the M/s. Durr, Germany, which were supplied free of cost. So, the appellant had not included the consideration of the drawings in their assessable value. 1.4 A show-cause notice dated 23.7.2002 was issued by the Commissioner of Central Excise, Chennai - II Commissionerate proposing to re-determine the value of parts ....
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....he assessee and therefore Rule 5 of Valuation Rules cannot be invoked. (d) Without prejudice, the addition of value of engineering, development, art work, design work etc. necessary for the production of the goods has been incorporated under Rule 6 of the new Central Excise Valuation Rules, 2000. (e) Unless the consideration has been paid for design and drawing to the manufacture, who has manufactured and supplied excisable goods with the help of such drawings, there is no scope to include cost of such drawings and designs in the assessable value. He relied upon the following decisions:- (a) CCE Vs. Luna Agro Industries Pvt. Ltd. - 2009 (242) ELT 130 (b) CCE Vs. Maharashtra Scooter Ltd. - 2009 (246) ELT 209 &nbs....
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....uty as per the statement of the representative of the companies. He submits that the appellant had not disclosed the documents to the Central Excise officers. The learned AR relied upon the following decisions:- (a) Swil Ltd. Vs. CCE - 2001 (128) ELT 510 (b) Mahalakshmi Glass Works Ltd. Vs. CCE - 1998 (99) ELT 696 (c) Garlick Engineering Vs. CCE- 1998 (102) ELT 26 (d) Elecon Engineering Co. Ltd. Vs. CCE 2000 (124) ELT 762 (e) Macawber Beekay Ltd. Vs. CCE 2008 (229) ELT 404 4. After hearing both sides and on perusal of the records, we find that the main contention of the appellant is that the appellant undertook job work and paid duty on cost of raw materials and conversion charges as per the decision of the Hon'ble Supreme Court in the case of Ujagar Prints Ltd. (supra). It is contended that the appellant had no....
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....'processor's expenses & costs' shall essentially include the engineering cost and cost of drawing because without 'Engineering & Drawing' the parts of Paint Finishing System could not have been manufactured by L&T; also, if the engineering and drawing were not supplied by MFIL and HMIL on free of cost, L&T would be left with no option except to procure such engineering and drawing; certainly L&T would have incurred the expenses for the same and, those expenses should have undoubtedly been taken into consideration for determining the assessable value for payment of duty. The decision in the above case was delivered by the Hon'ble Supreme Court following the ratio of the decision in Ujagar Prints etc. Vs. UOI and other 1988 (38) ELT 535 (SC) and 1989 (39) ELT 493 (SC) which were also relied on by L&T. In Ujagar Prints etc. 1989 (39) ELT 493 (SC) while disposing the CMP 32937 of 1988 filed by the Revenue, the Hon'ble Supreme Court has given an illustration as follows:- If the value of grey cloth in the hands of the processor is Rs. 20/- and the value of the job work done is Rs. 5/- and the manufacturing profit and expenses for the process be Rs. 5/-, then in such a case the v....
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.... contract between the parties can safely be taken as not the sole consideration for the sale of the finished product, the other consideration being value attributable to the use of the mould. Similarly, in the instant case, we find that the contract between the appellants and the customer was for consideration of Lead Annealing Bath, though the drawings were to be supplied free of cost by their customer. As such, it cannot be said that the ingredient of Section 4(1)(a), which required the price to be the sole consideration for the sale were available. The appellants, admittedly could not have manufactured the product in question without having the designs and drawing before them. As such, as held by the Larger Bench, it cannot be held in the circumstances that the price was the sole consideration so as to adhere to the provisions of Section 4(1)(a) and not to invoke Rule 5 of Central Excise Valuation Rules, 1975. Accordingly, no merits are found in the said contentions of the appellants also. 7. In the case of Macawber Beekay Ltd. (supra), the Tribunal held as under:- We have gone through copies of various supply ....