2016 (9) TMI 43

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.... authority allowing quantity discount in orders-in-original dated 24.07.2002 and 11.11.2002. As the issue in both the appeals is the same, therefore both the appeals are being disposed of by a common order. 2. Briefly the facts of the present case are that the appellant is a manufacturer of P or P medicines falling under Chapter 3003.20 of the 1st Schedule to the Central Excise Tariff Act 1985 and they carry on job work on behalf of the brand owners/principal manufacturers. Appellants were issued show-cause notice dated 06.08.2002 covering the period from 01.07.2001 to 31.12.2001 demanding duty of Rs. 60961/- in Appeal No. 616/2004 and for the period 3/2000 to 6/2000 & 12/2000 to 6/2001 amounting to Rs. 76663/-, alleging that they had de....

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....he learned Commissioner (Appeals) setting aside the portion of the order of the adjudicating authority wherein the quantitative discount was allowed is wrong and illegal and is not sustainable in law in view of the judgements of the Hon be Supreme Court. The learned counsel further submitted that the Constitution Bench of the Hon'ble Suprme Court in the clarificatory judgement in the case of Ujagar Prints Pvt Ltd Vs UOI [1989(39)ELT 493 (SC)] has held that the assessable value of the processed fabrics will be the value of the gray cloth in the hands of the processor. The value of job work done plus manufacturing profits and manufacturing expenses will be either included in the price at the factory gate or deemed to be the price at the facto....

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....ry gate here means deemed factory gate  as if the processed fabric was sold by the processor. The learned counsel also submitted that in view of the clarification by the Hon'ble Supreme Court in the case cited supra, the reasoning given by the learned Commissioner (Appeals) that there is no sale in the transaction and therefore no discount is available, is not correct in law. Further on perusal of the invoices during the relevant period, we find that the quantity of P or P medicine cleared from there as quantitative discount was known at the time of clearance of the goods at the factory gate. Here it is pertinent to note that the original adjudicating authority has observed that in respect of the same unit, for the earlier period, the ....