TaxTMI 
TaxTMI 
2026 (4) TMI 146
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....riefly stated the facts of the case are that the appellants are basically engaged in the export of coffee and spices. These commodities are purchased from growers, agents, farmers and traders and after processing the same viz., de-husking, sorting, bulking, grading, packing, etc., these are exported through ports of Cochin, Haldia, Mangalore, ICD, Bangalore. The finished goods were exported in HDPE/PP woven Jumbo bags, HCF jute bags, poly sacks, ply lined PP/HDPE woven bags etc., after being packed and machine stitched against export under target plus scheme i.e., exports made during 2004-05. 12 target plus licenses were granted to them on 05.09.2006 by JDGFT, Chennai. Against this authorization, they had imported plastic granules of variou....
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.... is undervalued and consequently, after recording statement of the person concerned, redetermined the assessable value of the goods and issued show-cause notice on 16.06.2011 demanding differential duty of Rs.1,52,83,090/- for the clearance made during December 2007 to January 2009. On adjudication, the demand was confirmed along with interest and penalty. Hence, the present appeal. 4. At the outset, the learned advocate for the appellant has submitted that they are engaged in the export of coffee and spices under target plus scheme. Since the said coffee and spices exported were packed in PP/HDPE bags, they have imported PP/HDPE/LDPE granules through high sea sales using the TPS scrips. The custom duty liability was debited in the scrip....
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....as further submitted that there is no provision under the Central Excise law which prohibits the sale of the final product to the job workers. The business model adopted by the appellant was with the intent to work within the scope of the restriction imposed on the use of TPS scrips under FTP. Further, he has submitted that occasional sale of the final product below the cost of production itself cannot be the basis for demand if there is no additional consideration flowing to the appellant from the buyer. The department has misconstrued the duty exemption for imports under TPS scrips as additional consideration and observes that the beneficiary is the job worker. The said finding does not fall under the scope of additional consideration as ....
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....b worked finished goods viz., PP fabric, liners, plain film flexible, assorted plastic bags, pp woven fabrics, etc., to the job workers themselves be determined under Rule 10A(i) or Rule 11 of the Central Excise (Determination of Price for Excisable Goods) Rules, 2000. Undisputed facts of the case are that the appellant imported PP/HDPE/LDPE granules against their target plus scrips and sent the same to the job worker for conversion into PP fabrics, liners, plain film flexible and HDPE linings. On conversion, they have received certain quantity of finished goods but major quantity of finished goods on payment of duty on agreed transaction value had been sold to the job workers. The department has doubted the transaction value alleging that ....
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....in of profit cannot be sustained. Further, from the records, we find that the appellant has submitted cost of production by adopting CAS-4 method only to justify that the sale made by the appellant to the job worker is not abnormal and an acceptable transaction at arm's length. 8. We find merit in the arguments of the leaned advocate for the appellant, in as much as, it is not in dispute that the granules were purchased and purchase price of granule varied from 56.09 to 92.37 as submitted by the appellant during the course of hearing before the adjudicating authority as well as before us which has been recorded in the impugned order. Therefore, adopting lowest purchase price and highest selling price to determine the margin of profit can....