TaxTMI 
TaxTMI 
2016 (11) TMI 1342
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.... Gamble Home Products Ltd. based on the inputs supplied to them by the principal manufacturer. The dispute in the present case relates to valuation of intermediate products manufactured by the appellant for the principal manufacturer. The Revenue held that w.e.f. 1.4.2007, the valuation of the goods manufactured on job work basis on behalf of the principal manufacturer is required to be done in terms of Rule 10 A of Valuation Rules, 2000. Since the provisions of Clause (i) and (ii) of Rule 10 A is not applicable, the provisions of Rule 10 A(iii) is to be applied. The Revenue held that the appellants were required to discharge excise duty in terms of Rule 8 of Valuation Rules i.e. on 110% of value of cost of production. The duty demand was c....
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.... said LABSA cleared from factory premises, based upon the cost of material plus processing charges prior to 1-4-2007 when the provisions of Rule 10A were inserted into the Central Excise Valuation Rules, 2000. It is also undisputed that the said LABSA is returned back to Ms. HUL for further consumption in their factory premises for manufacturing of soaps and detergents. It is nobody 's case that LABSA consumed by HUL is on behalf of the appellant herein. 8. At this juncture, we find that a clarification which has been issued by the Ministry of Finance dated 31-3-2010 needs to be addressed to. We reproduce the said clarification. F. No. 6 15/2009 -CX. 1 Government of India Ministry of Finance Department of Revenue Central Board of ....
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.... the Circular are inconsistent with the provisions o Rule 8. The provisions of Rule 8 can be brought into play only if there is consumption of the goods by himself or on behalf of an assessee. Since the said clarification is against the mandate of the said Rule 8 of Central Excise Valuation (Determination of Prices of Excisable Goods) Rules, the said clarification is untenable and has to be held as such. 9. We find that our above view has been confirmed by the bench in the Tara Industries Ltd. case (supra). We may reproduce the said ratio. "2. The appellants manufacture 'Wool Tops ' on job work basis out of raw wool received from parties for whom the job work is undertaken. They worked out the assessable value (for Central Excise ....
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....basis is not new. Under the provisions of the earlier Section 4 and the Rules made thereunder the matter has been finally decided by the Apex Court in the case of Ujagar Prints Ltd. [1989 (39) E.L.T 493 (S.C.)] and the case of Pawan Biscuits Co. Pvt. Ltd. [2000 (120) E.L.T. 24 (S. It was clearly held that in respect of goods manufactured on job work basis, assessable value would be the job charges (including the profit of the job worker if not already included in the job charges) plus the cost of the materials used in the manufacture of the item (including the costs of the materials supplied free of cost to the job worker). The assessable value in such cases will not include the profit or the expenses like advertisement and publicity, overh....