TaxTMI 
TaxTMI 
2026 (5) TMI 1657
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.... Sons Ltd. The Notice alleged under-valuation of goods manufactured and supplied on job-work basis. The said show cause notice was issued pursuant to an audit objection raised by the audit team upon scrutiny of the records of the main Noticee M/s. Fedders Lloyd Corporation Ltd. (hereinafter referred to as 'FLCL'), Sikandrabad. The appellant herein is a co-noticee in the matter and before proceeding any further it may be appropriate to place on record that the appeal filed by the main party-M/s. Fedders Lloyd Corporation Ltd. also a co-appellant with the present appellant in the matter was earlier dismissed for non-prosecution in terms of Rule 20 of the CESTAT Procedure Rules, 1982. The appeal filed by the present appellant, however came to ....
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....thin air and is without any substantiation. The appellant further submitted that there was no question of imposition of penalty upon them in terms of Rule 26(1) of the Central Excise Rules. 5. It is noticed from records that the alleged short levy of duty has been confirmed by the lower authorities against the main noticee FLCL. There is a categorical finding to the effect of M/s. FLCL having failed to discharge appropriate duty on finished goods in para 16 of the order of the adjudicating authority. 5.1 The appellant herein is contesting both the charge of under-valuation as well as the imposition of penalty of Rs.3.50 Lakh upon them by the Adjudicating authority. In appeal proceedings before the Commissioner(Appeals), the Order-in-O....
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.... alia stating that the impugned works contract was executed by them partly through goods received from Sikandrabad unit of FLCL and partly from the goods received from their own Haridwar unit. He submits that no case of valuation of goods under Rule 10A(2) of the Central Excise (Determination of Price of Excisable Goods) Rules, 2000 (hereinafter referred to as 'Valuation Rules') was made out against them, as Rule 10A(2) is applicable where the job-worked goods are not sold by the principal manufacturer at the time of their removal, but are transferred to some other place and sold thereafter. He submits that the appellant never sold the said goods and the same were used in execution of the works contract. The said goods were tailor-made to m....
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....in fact the appellant had resorted to under-valuation by way of planning and an understanding with the main appellant, from whom the appellant had procured the goods. 10. From the facts aforesaid it is clear that the appellant is certainly not a manufacturer or a principal manufacturer, but is a contractor discharging the 'Works Contract Service', for fulfillment whereof the appellant was required to get the certain items fabricated for installation of the various requisites for setting up of the Lectures Theatre-cum-Lab Complex. 11. It is evident from records that the appellant had procured the aforesaid tailor made steel structures for execution of the works contract assigned to them by the IIT, Delhi as aforesaid. That the items pr....
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....ution of a Works Contract can be considered as goods sold in ordinary course of business or trade. For ready reference Rule 10A(ii) of the Valuation Rules is enumerated hereinbelow: [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, - (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 as the sole considerati....
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.... fall within the meaning of the word 'sale' as assigned in terms of Section 2(h) of the Central Excise Act. The term 'sale' used in Rule 10A of the Valuation Rules will accordingly derive its meaning from the said definition of 'sale' as contained in Section 2(h), which reads as under : 2. Definitions In this Act, unless there is anything repugnant in the subject or context, - ..................... ..................... (h) "sale" and "purchase", with their grammatical variations and cognate expressions, mean any transfer of the possession of goods by one person to another in the ordinary course of trade or business for cash or deferred payment or other valuable consideration; 13. There is thu....