TaxTMI 
TaxTMI 
2007 (6) TMI 59
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....raw material to final product was considered as 87% in the case of double rolling and 91% in the case of single rolling. M/s. TISCO has allowed the appellant to retain the scrap at their end. The conversion charges ranged from Rs. 4,000/- per MT to Rs 5,500/- per MT depending upon the nature and quality of the material received from M/s. TISCO. In addition to the same the appellants was also receiving documentation charges Rs. 10/- per MT from M/s. TISCO. 2. During the course of scrutiny it was found that the appellant was paying duty at the price declared by M/s. TISCO which was much less than the cost of the raw material + conversion charges and the cost of scrap retained by the appellant. M/s. TISCO were submitting two sets of price, on....
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....what would be the price at which he would be selling the processed goods in the market, that would be taken by the Excise authorities as the assessable value of the processed fabric and excise duty would be charged to the processor on that basis provided that the declaration as to the price at which he would be selling the processed goods in the market, would include only the price or deemed price at which the processed fabric would leave the processor's factory plus his profit. It was submitted that in their case also the appellants have cleared the goods at the sale price declared by M/s. TISCO and therefore this was inconformity with the decision of the Apex Court in Ujagar Prints case. It was submitted that the above principle has been ....
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.... the Jurisdictional Superintendent vide his letter dated 15-12-1995 wherein he has referred to the two sets of price being declared by M/s. TISCO and further CERA audit has in its audit report in February 1997 referred to the incorrect method of arriving at the assessable value as the same was lower than the cost of raw material. In view of this demand was time barred. They were under the bona fide belief that the goods were required to be assessed at the value as declared by M/s. TISCO as per decision in the Sangam Processor's case and the other cases. 6. Reference was also invited to the decision of Commissioner of Central Excise, Indore v. S. Kumar's Ltd. - 2005 (190) E.L.T. 145 (S.C.) wherein it was held that the decision of Ujagar Pri....
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....job charges + other expenses recovered from supplier and not on the prices declared by M/s. TISCO and therefore the demand cannot be faulted with. The appellants have never disclosed that the assessable value was less than the cost of raw material and reference to the Superintendent's letter goes in favour of the department as the appellants have in their reply misstated that the duty was being paid on a higher price when actually they were paying duty at a lower price. 9. We have considered the submissions. We find that the appellants case is squarely covered by the decision of the Supreme Court in the case of Ujagar Prints (cited supra). The relevant portion of the Supreme Court decision has also been reproduced in the Sangam Processor's....
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.... goods must be the value of the grey cloth or fabric plus the value of the job work done plus the manufacturing profit and the manufacturing expenses. The Tribunal in the case of Sangam Processors and other have only held that if the cost of grey fabric (raw material) is incorrectly given by the trader which is not in the knowledge of the job worker, the job worker cannot be held liable for the incorrect declaration of price by the trader. In the present case the correct price of the raw material was being intimated by M/s. TISCO as they were giving two sets of prices and therefore the appellants cannot take a stand that the duly was to be paid by some arbitrary price declared by M/s. TISCO. We further note that Larger Bench of the Tribunal....
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....bility to do so. We are also not convinced by the plea of bona fide belief as the law was laid down by the Supreme Court in 1989 in Ujagar Print's case and was followed through out and the decisions in the case of M/s. Sangam Processors has been twisted by the appellants. Even otherwise this decision was delivered in 2000, whereas demand is for year 1996 to 2000 and therefore they could not have been guided by it. The Board's circular referred to by them is also very categorical that in case the goods are manufactured on job work basis and returned to the supplier, the assessable value is to be determined on the basis of formula prescribed in the Ujagar case. The plea of time bar is there fore rejected. 12. As regards computation of demand....