TaxTMI 
TaxTMI 
2017 (3) TMI 992
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....value of the finished fabrics was declared for per L. Mtrs and not for entire lot. While determining this per L.Mtr finished fabrics, the cost of grey fabrics per L.Mtr had been considered without loading shrinkage factor. That is the assessee considered the cost of one L.Mtr grey fabric for determining the value of one L.Mtr finished fabric without loading shrinkage factor I.e, assessee has not considered that for manufacturing one L.Mtr finished fabric more than one L.Mtr grey fabric shall be required. Also the assessee has not adduced any documentary evidence to show that the Merchant Manufacturer has declared the cost of grey fabrics after factoring for the shrinkage. It is therefore very clear that the Merchant manufacturer has declared only the purchase price of the grey fabrics without factoring for the shrinkage." 3. Upon confirmation in order-in-appeal no. BR/273/Th-I/06 dated 20th April 2006 of Commissioner of Central Excise, Mumbai Zone-I (Appeals), the matter is before us. 4. We have heard Learned Counsel for appellant and Learned Authorized Representative. 5. Learned Authorized Representative relies upon the decision of the Tribunal expressed in Indian Rayon & Indus....
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....hority shall adjudicate the case de novo on affording a reasonable opportunity of hearing to them. xxxxxx 22.I do not find any merit in the above contention since the observation of the Supreme Court as quoted above would make it clear that the selling price as declared by the trader would include only the price or deemed price at which the processed fabric would leave the factory plus his profit. Therefore, the price of the fabric at the point of its leaving the processor's factory is a relevant factor. While computing the deemed price at the processor's factory gate the value of the grey clothes handed over to the processor has necessarily to be taken into consideration. This is clear from the illustration given in the reference order and which was again quoted in the clarificatory order of the Supreme Court. If wastage during the process has to be fixed at 5% it requires 100 sq. metre of grey fabrics for removing 95 sq. metre of processed grey fabrics at the factory gate. Admittedly, this aspect has not been taken into consideration by the assessee while adopting the assessable value. On the other hand, it had derived at the assessable value by multiplying the price of process....
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....spite of notice. Notice was also sent to their advocates who had withdrawn from the case as seen from letter dated 11-7-2005. Hence, we heard the ld. SDR and perused the records. The issue for determination is as to what are the manufacturing expenses and manufacturing profits which are to be included in the assessable value, besides Value of grey cloth and value of job work done, in respect of fabrics processed on job work basis. The assessable value of the fabrics will be the sum total of - (i) value of the grey cloth at the hands of the processor, (ii) value of the job work done, (iii) manufacturing expenses, and (iv) manufacturing profit. The appellants had never disputed the inclusion of manufacturing expenses and manufacturing profits in the assessable value as such inclusion is legally correct in the light of the Supreme Court decision in the case of Ujagar Prints. The only plea raised before the authorities below and in the appeal before the Tribunal is that by considering and including 5 to 12% towards shrinkage, insurance and other miscellaneous expenses, they have included the manufacturing profits and expenses in job charges. However, as pointed out rightly by the ....
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....facturing profits and break-up along with elements of manufacturing expenses and profits are also specified. The appellants, contention that Asstt. Commissioner had no jurisdiction or power to determine quantum of grey transportation cost, expenses for octroi duty, cost towards shrinkage element, manufacturing expenses, manufacturing profit, etc. are untenable. The values in the circumstances as in this case, are determinable under Central Excise Valuation Rules, 1975 and Rule 7 thereof provides for determination of value by Asstt. Commissioner according to his best judgment and having regard among other things, to any one or more of the methods provides for in Rules 1 to 6. I find that Asstt. Commissioner on consideration of records and factual position, determined quantum of different elements of manufacturing expenses. I find that Asstt. Commissioner also considered the appellants profit and loss accounts which showed gross profits of 19% to 22% and has inferred that such high profit percentage, which relates job work activities, was not comparable with profits accruable on sale of fabrics at the appellants factory gate and that entire trade in the region has accepted and are i....
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....shows that there is expansion and shrinkage in the warp and weft which is more than 1.5% in the specific samples supplied. This evidence along with the evidence of SITRA shows that appellants had not installed the stenter machine which is a requirement for bringing into existence a shrink-proof cotton fabric in terms of judgment rendered in the case of Omkar Textile Mills (P) Ltd. (supra). The ld. Commissioner has attempted to distinguish this judgment of the Tribunal, which is confirmed by the Apex Court, solely on the ground that shrinkage can be achieved through mechanical and chemical processes. This finding is a perverse finding and the ld. Commissioner has attempted to sideline the ruling of the Tribunal which is applicable on all fours to the present case. The notification clearly applies to a factory which has installed zero-zero machine without a stenter and processes are carried out on cotton fabric. In the present case, the appellant is a job worker and they had carried out processes as required in the notification with the zero-zero machine without a stenter which is a requirement for the purpose of bringing into existence shrink-proof cotton fabric. The appellants have....