2018 (5) TMI 661

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....nimay Pvt. Ltd. was engaged in the manufacture of asbestos cement pipes and couplings on job work basis. The assessee-Respondents, M/s A. Infrastructure Ltd., had got manufactured asbestos cement pipes and couplings on job work basis. The said job worker had cleared the asbestos cement pipes and couplings on payment of duty subject to exemption Notification No. 06/2006-CE dated 01.03.2006 to the principal manufacturer i.e. assessee-Respondents herein. An investigation was carried out and it was found that the goods cleared on payment of duty were not sold by the job worker but transferred to the principal manufacturer on the basis of indent of delivery and taxes like VAT was also not shown by the job worker, but paid by the principal manufa....

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....st 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, overheads etc.) incurred by the buyer (or the supplier of the raw materials), where the dealing between the two are on principal to principal basis. The mere fact that the buyer is supplying some raw materials free of cost to the job-worker, will not be sufficient ground to contend that the dealings between the two are not at arms length. Goods manufactured on job-work were earlier assessed under the residuary Rule 7 of the erstwhile valuation Rules of 1975 read with rule 6(b) read with the Apex Court decisions referred to above. 3. Under the new valuation pr....

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....e used or, as the rule says, consumed by the assessee or on his behalf in the production of manufacture of other articles clearly will not apply. The goods that were used by the appellant in the production of finished goods were not those that were manufactured by the supplier of the raw material. The Circular of the Board 619/10/2002-CX., dated 19-2-2002 reported in 2002 (140) E.L.T. T28 provides that goods manufactured on job work would have to be valued in terms of Rule 11 read with Rule 6 of the Valuation Rules read with the judgment of the Supreme Court in Ujagar Prints Ltd. - 1989 (39) E.L.T. 493 and Pawan Biscuits Co. Pvt. Ltd. - 2000 (120) E.L.T. 24. In Ujagar Prints, the Supreme Court said that value for assessment of the goods man....