AI Drafter 
TaxTMI 
TaxTMI 
2016 (11) TMI 506
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....ed products i.e. the said goods to TISCO s designated customer or place, on terms and conditions as specified in the said agreement. On the basis of the said agreement, TISCO cleared rough forged rings from its Jamshedpur Steel Works under central excise invoices and transferred the same to the premises of the appellant. The appellant thereafter sent the said goods (except to the extent of 3% to 5%) to job workers identified by TISCO for carrying out machining work on the said forged rings. The said job workers were paid by TISCO at agreed rates. The scrap generated in the job workers place during machining process was sold by the job workers, after clearing the same upon payment of appropriate central excise duty thereon. The finished products were sent by the job workers to the appellant who thereafter, upon testing, etc., cleared the same to TISCO s customer, SKF Ltd., on payment of duty thereon as per the assessable values fixed by TISCO from time to time, as per its contract with SKF Ltd. Following five show cause notices were issued by Revenue authorities: Sl. No. SCN date Period 1. 4.3.2004 February 1999 to September 2003 2. 15.10.2004 October 2003....
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....nter space hiring charges were all included in determining the assessable value of the said goods on which duty was paid. The breakup of the invoice price at which the said goods were sent by TISCO evidence this, hence the duty demand by including the said costs/charges once again is unsustainable. 5.3 Further, although adjustment of duty paid on scrap has been allowed in the impugned order, the same has not been taken into consideration while computing the purported short paid duty demand. From the chart included in the compilation, it would be seen that the total duty paid by the appellant during the period involved on the scrap cleared by its job workers is Rs. 44,84,165/- plus Rs. 6,878/- education cess thereon, amounting to a total of Rs. 44,91,043/-. On adjustment of this amount from the purported duty amount of Rs. 64,53,346/- confirmed by the impugned order, and the duty amount requantified as directed to be done by the impugned order, the amount of purported duty payable by the appellant even as per the impugned order, assuming though denying the same to be legally tenable and correct, can be only Rs. 19,62,303/-. 5.4 Without prejudice, the duty demand for the period....
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....nsidered the detailed submissions made both sides and perused the records. 9. The issue that falls for consideration in this case is whether appellant has undervalued the bearing rings manufactured by them and cleared to SKF Ltd. or otherwise. 10. In this case, undisputed facts are:- (a) Appellant is a conversion agent undertaking job work of bearing rings for TISCO. (b) Material required is supplied by TISCO. (c) Appellant gets job charges and other charges like transport charges, godown rent etc., as contracted with TISCO. (d) That the bearing rings are dispatched directly to SKF Ltd. on instructions of TISCO. (e) Central excise duty is discharged on the value charged by TISCO to SKF Ltd. 11. On perusal of the records, we find that by an agreement dated 11.5.1999, appellant is undertaking job working of bearing rings and is paid as per the considerations agreed. It is the case of the appellant that, having discharged the appropriate duty on manufactured goods on the sale price of TISCO to SKF, there is no need for inclusion of any of the elements of cost while it is the case of Revenue that additional amounts received by appel....
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....pted by the appellants. There could be no arguing that, by adopting the sale price of SAIL, the appellants under valued the goods and paid less duty than was due. It is apparent that there could be no short-levy in respect of the goods cleared by the appellants. The duty demands made against the appellants are clearly the result of a gross misunderstanding of the principles of valuation laid down by the Apex Court in the Ujaggar Prints case. These demands are not sustainable." The above said order of the Tribunal is upheld by the Hon'ble High Court of Punjab & Haryana as reported at 2008 (226) ELT A182 (P&H). (b) CCE, Chandigarh vs. Prem Khalsa Iron & Steel Rolling Mills 2005 (191) ELT 192 (Tri.-Del.). (c) CCE, Surat-II vs. Tirupati Weaves Pvt. Ltd. 2014 (311) ELT 659 (Tri.-Ahmd.), wherein the Tribunal held as under:- "2. The assessee had adopted the value on the basis of selling price of Reliance Industries Ltd. (RIL) in respect of texturised yarn and were paying duty on that basis. The department s contention was that the value has not been correctly arrived at and the basis adopted by the appellant even though was claimed to be the price....