2020 (1) TMI 6

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....for and on behalf of the principal manufacturer M/s Parle Biscuits Pvt. Ltd., in terms of the agreement entered between the two. M/s Parle is procuring the raw material and supplying the same to the appellant for manufacture of the confectionaries, which were being cleared by the appellant on payment of Excise duty on MRP as declared by M/s Parle. 2. M/s Parle is making payment of job charges to the appellant on per kilo basis of confectionary as agreed upon between the two. However in case the quantum of goods got manufactured by M/s Parle is less than standard mutually agreed upon quantum, the appellants are entitled ex-gratia job charges to cover up the loss or deficiencies in normal job charges to be received by the appellant. The qu....

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....he same. We find that appellant is admittedly manufacturing confectionaries for and on behalf of the M/s Parle and is clearing the same upon payment of Central Excise duty on the basis of MRP declared by M/s Parle. It is only in situation when the appellant's capacity, as a manufacturer, is not being fully utilized by M/s Parle, their claim of ex-gratia charges arises so as to compensate them from the financial damage/injury. As such, ex-gratia amount is not fixed and is mutually decided between the two, based upon the terms and conditions of the agreement and is in the nature of compensation in case of low/less utilization of the production capacity of the assessee. The Lower Authorities have invoked the provision of the Section 66E (e)....