TaxTMI 
TaxTMI 
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2025 (10) TMI 175
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....Central Excise (Appeals-II), Chennai who has upheld the demands confirmed while setting aside the penalties imposed in Orders-in-Original No. 04/2016 dated 29.07.2016 and No. 05/2016 dated 29.07.2016. 2. Brief facts of the Appeals are that, the Appellants, manufactured HDPE Plastic Caps on job work basis, out of the raw materials supplied by M/s. Marico Ltd. Upon verification by the department, it appeared that the value adopted by the Appellants by considering the cost of materials plus conversion cost, was not in accordance with Rule 10A (iii) read with Rule 8 of Central Excise Valuation Rules, 2000 (CEVR) resulting in short payment of duty. Hence, Show Cause Notices No. 3/2016 dated 21.03.2016, SCN No 01/2016 dated 06.01.2016 and corrigendum dated 08.02.2016 were issued to the Appellants for the periods January 2015 to December 2015 and February 2015 to October 2015, proposing to re-determine the value and demand differential duties of Rs.3,89,177/- and Rs.3,67,939/- under Section 11A of the Central Excise Act, 1944 along with applicable interest under Section 11AA of the CE Act 1944 and to impose penalty under Rule 25 of the Central Excise Rules, 2002. The Adjudicating Authori....
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....ainst the mandate of Rule 8 of CEVR and hence untenable. The above decision of the Tribunal was followed in Rolastar Pvt. Ltd. Vs. CCE, Daman [2012 (276) ELT 87 (Tri.-Ahmd.)] and Indian Extrusion Vs. CCE, Mumbai [2012 (283) ELT 209 (Tr.i-Mum)]. iv. The Appellant also pointed out the reliance placed in the impugned order on the decisions in the case of M/s. Shivani Detergent Pvt. Ltd. Vs. CCE, Delhi [2013 (296) ELT 88 (Tri.-Del.) and Hyva (India) Pvt. Ltd. Vs. Union of India [2015 (327) ELT 41 (Bom.)] was misplaced. 5. The Ld. Counsel Shri G. Krishna Moorthy representing both the Appellants reiterated the averments in the grounds of appeal and further submitted that in similar circumstances in thier own case for earlier period, the CESTAT Chennai has set aside the demand in Final Order Nos. 40047 - 40048 / 2025 in the case of M/s.Smith Enterprises Versus Commissioner of GST and Central Excise, Puducherry Commissionerate 2025 (1) TMI 422 - CESTAT CHENNAI and prayed for setting aside the impugned order. Further reliance was also placed on the ratio of the Apex Court's decision in the case of CCE Vs. Aqua Pet Industries [2013-TIOL-07-SC-CX]. 6. The Ld. Authorized Representative Ms.....
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....emises for manufacturing of soaps and detergents. It is nobody's case that LABSA consumed by HUL is on behalf of the appellant herein. 7. On these factual matrix we need to appreciate the provisions under Rule 10A, which is reproduced herein under:- "RULE 10A. Where the excisable goods are produced or manufactured by a job-worker, on behalf of a person (hereinafter referred to as principal manufacturer), then, - (i) in a case where the goods are sold by the principal manufacturer for delivery at the time of removal of goods from the factory of job-worker, where the principal manufacturer and the buyer of the goods are not related and the price is the sole consideration for the sale, the value of the excisable goods shall be the transaction value of the said goods sold by the principal manufacturer; (ii) in a case where the goods are not sold by the principal manufacturer at the time of removal of goods from the factory of the job-worker, but are transferred to some other place from where the said goods are to be sold after their clearance from the factory of job-worker and where the principal manufacturer and buyer of the goods are not related and the price is the sole cons....
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....consumption by him or on his behalf in the production or manufacture of other articles, the value shall be [one hundred and ten per cent] of the cost of production or manufacture of such goods." 7.2 It can be seen from the above reproduced Rule that this will come into play only when the goods are used for consumption by the assessee or on his behalf, in the production or manufacture of other articles, in such a case the value shall be 110% of the cost of production or manufacture of such goods. If this rule needs to be applied in the case, then it is to be on record that LABSA is a product of the appellant herein and is consumed by HUL on appellant's behalf or the said products are consumed by some other job worker of the appellant, in his factory for further manufacturing of goods. In the absence of any such situation, we are of the view that provisions of Rule 8 will not come into play. As already reproduced herein above, it is undisputed that LABSA is manufactured by job worker and cleared to HUL for further consumption and the said LABSA is the intermediate product required by HUL which is manufactured or produced by the appellant as a job worker. The key words in Rule 8 tha....
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....ibunal was followed in subsequent judgements delivered by the Tribunal in the case of Rolastar Pvt. Ltd. Vs. CCE, Daman [2012 (276) ELT 87 (Tri.-Ahmd.)] which was affirmed by the Hon'ble Supreme Court in [2013 (298) E.L.T. A186 (S.C.)] wherein it was held that: - "In these appeals, no substantial question of law arises for our consideration. The same are dismissed accordingly." The Appellate Tribunal in its impugned order had held that finished product (hollow profiles) manufactured on job work basis were sent back to principal-manufacturer providing raw material and consumed by the principal-manufacturer for further manufacture of final product. Rules 10 and 8 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules 2000 not applicable." 11. We are consciously refraining from burdening this order by reproducing from the wealth of jurisprudence available in this regard to avoid prolixity. It is suffice to note that similar view has been taken earlier by this Tribunal in more or less similar facts and circumstances, and the issue is no longer Res-Integra as can be seen from the above decisions, and also in the decisions in the 3 CASES of the One of the Appe....