TaxTMI 
TaxTMI 
2026 (5) TMI 363
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....asis using the inputs supplied by the principal manufacturer. It was noticed that the Appellant had been clearing the said excisable goods on payment of central excise duty for which the assessable value had been arrived at by adding material cost and the conversion cost charged by them on the strength of the cost certificate furnished by C.A. for every quarter of the year. The department was of the view that since the caps sold by the Appellant were put to use in further manufacture by Marico, valuation had to be made in accordance with the provisions of Rule 10A (iii) of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 read with Rule 8 of the Rules ibid by adopting 110% of the cost of production of the said goods as the assessable vale. Therefore, a Show Cause Notice dated 16.11.2017 (SCN) on the aforesaid allegation was issued demanding differential central excise duty on the goods cleared for the period from November 2015 to June 2017 along with appropriate interest and proposal to impose penalty under Rule 25 of the Central Excise Rules, 2002. After due process of law, the Adjudicating Authority confirmed the demand along with appropriate in....
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....ment therefore contends that after 01.04.2007 the valuation should be done applying Rule 10A(iii) r/w Rule 8 of Central Excise Valuation Rules which applies when goods are not sold. The appellant does not captively consume the goods nor does M/s. Marico consume it on behalf of appellant. The very same issue has been considered by this Tribunal in the case of M/s Smith Enterprises, one of the Appellants vide Final Order No. 40293-40297/2018 dated 02.02.2018 following the judgement in the case of M/s. Advance Surfactants India Ltd. Vs CCE, Mangalore [2011 (274) ELT 261 (Tri.-Bang.)], the extracts of which has been reproduced below: - "6. The undisputed fact in these cases is the appellant herein is a job worker manufacturing LABSA for M/s. HUL. It is also undisputed that HUL gives LAB and the appellant uses other consumables in the manufacture of LABSA. It is also undisputed that the appellant has been valuing the said LABSA cleared from factory premises, based upon the cost of material plus processing charges prior to 1-4-2007 when the provisions of Rule 10A were inserted into the Central Excise Valuation Rules, 2000. It is also undisputed that the said LABSA is returned ba....
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....there is a situation where excisable goods are produced or manufactured by a job worker on behalf of a person and cleared to the buyer of the principal and/or cleared to a depot or a consignment agent. The intention of the Legislature was to capture the tax on the goods, on the value of the said goods when cleared to the ultimate consumers. In the case in hand, we find that provisions of Rule 10A(i) and (ii) does not arise as has been recorded by us in the earlier paragraphs. Provisions of rule 10A(iii) gets attracted which talks about a situation where 10A(i) or (ii) does not apply. The said provision (iii) very clearly mandate that in a case not covered under clause (i) or (ii), the provisions of foregoing rules, wherever applicable shall mutatis and mutandis apply for determination of value of the excisable goods. This would indicate that the provisions of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 has to be gone through serially. It is not the Revenue's case that provisions of Rules 3, 4, 5, 6 and 7 would also apply in this case. Revenue is of the view that provisions of Rule 8 will apply. In order to understand the Revenue's case, we repro....
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....sions of this Tribunal and accepted by Revenue in their various Circulars will squarely apply i.e. to ascertain the assessable value on the cost of materials plus processing charges. In our view, the appellants have been correctly valuating their products by adopting this method. 12. We find that the judgment relied upon by the learned SDR of this Bench in the case of Ultrapack is on a different set of facts i.e. in that case, the 'Ultramarine blue' was sent in bulk form by M/s. Reckitt Benckiser India Ltd. and the said product was repacked by the assessee, for Reckitt Benckiser India Ltd. and hence it was held that Rule 8 will be applicable. It can be seen that in that case, Rule 8 was invoked because it was undisputed that repacking was done on behalf of Reckitt Benckiser India Ltd. which would clearly attract the provisions of Rule 8. The situation in the current appeal before us is totally different which has been set out by us in the earlier paragraphs. In view of this, the decision of this bench in the case of Ultrapack will not be applicable. 13. In the facts and circumstances of the case, in view of the foregoing, we are of the considered view that the imp....