TaxTMI 
TaxTMI 
Prices charged by job-worker cannot be regarded as understated where principal manufacturer has extended loan to job-worker for investment in machinery
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....rices charged by job-worker cannot be regarded as understated where principal manufacturer has extended loan to job-worker for investment in machinery<br>By: - Bimal jain<br>Central Excise<br>Dated:- 14-11-2015<br><br>Commissioner of Central Excise, Bangalore Vs. Campco [2015 (9) TMI 1085 - SUPREME COURT] Campco ("the Respondent") had been doing the job work on behalf of Nestle India Limited ("Ne....
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....stle") and was engaged in manufacturing of chocolates exclusively for Nestle. In addition, the Respondent was manufacturing the said chocolates for themselves as well, which were independently marketed. Nestle advanced a sum of ₹ 4.5 Crores to the Respondent for purchase of machinery. The Department contended that the Respondent was not charging the normal market price from Nestle for suppl....
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....y of chocolates because the price which was being charged was influenced by the amount advanced to the Respondent by Nestle. The Hon'ble Supreme Court held that the advance of ₹ 4.5 Crores was given by Nestle to the Respondent for purchase of machinery and it was only a loan transaction independent of the trading relationship between the parties and thus, had not impacted the price charged ....
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....from Nestle. Further, there was no mutuality of interest and the relationship was on principal-to-principal basis between the parties. Thus, the price at which the goods were sold by the Respondent to Nestle would be the value at which the Excise duty was payable.<br> Scholarly articles for knowledge sharing by authors, experts, professionals ....