TaxTMI 
TaxTMI 
2004 (6) TMI 184
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....oods cleared viz., 'Tor steel' of different specifications, were on the basis of the job work undertaken by the respondents. The Commissioner has noted that the determination of value could either be on the basis of price of the comparable goods or on the available price arrived at on cost construction basis. He has noted that when comparable goods criterion is applied it would further be very essential to have a way of comparison only the price of the goods, which are identical in specification. He has noted that the provisions of Rule 6, which has been applied by the original authority provided very little room for deriving such price from the price of 'Tor steel' of different specifications. Therefore, he has noted that on the other hand, since the cost construction basis provides the value of the goods under assessment itself (i.e. 'such goods') therefore, in his view the latter should be preferred because there is a greater possibility of arriving at the nearest ascertainable value by such a method. He has noted that this will have relevance to the goods under assessment. He has noted that in either case considering the fact that the goods are obtained through conversion on 'j....
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....erial after determining the value in terms of Section 4(1)(b) of the Act read with Rule 7 of the CE (Valuation) Rules, 1975 on the cost construction method and on payment of duty thereon. They had also sold the goods manufactured by them through their consignment agents. It was proposed in the show cause notice to determine the value of the goods on the basis of price applied by the assessee on similar goods manufactured and sold by them at their factory gate. The assessee did not dispute the fact but both the sets of goods had been sold or removed at the same time. They however, contended that in the case of goods manufactured on job work basis, the value should be determined in terms of Section 4(1)(b) of the Act read with Rule 7 of the CE Valuation Rules on the basis of cost construction. They also cited the Apex Court judgment rendered in the case of Ujagar Prints. The Assistant Commissioner noted that nowhere in the judgment of Ujagar Prints, it has been held by the Apex Court that the value of the goods manufactured on job work basis should always be determined in terms of Section 4(1)(b) of CE Valuation Rules on the cost construction method even if the normal price in terms ....
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....ermined. He noted that in terms of show cause notice the goods manufactured on job work basis are CTD bars of diameter 8 mm to 28 mm, whereas the goods which have been sold on the factory gate on the basis of whose selling price the value of the goods is proposed to be determined are 6mm/6.5 mm M.S. Coils. He noted that 6 mm/6.5 mm M.S. Coils have to be regarded as entirely different from that of 8mm to 28 mm Tor steel/CTD bars in view of the difference in diameter/description. In the trade the 2 sets of goods are recognised as altogether 2 different sets of goods. Secondly, he noted that in the case of rolled steel products as the dimensions go down the price goes up. Accordingly, the 6 mm/6.5 mm M.S. Coils has to necessarily cost more than the cost of 8 mm to 28 mm Tor steel/CTD bars. As such the price of 6 mm/6.5 mm M.S. Coils cannot be applied to determine the price of 8 mm to 28 mm Tor steel/CTD bar. Therefore, on this ground the proposal made in the show cause notice to determine the value of the goods manufactured on job work basis on the basis of the price applied by the assessee at the factory gate to 6mm/6.5mm M.S. Coils was held to be as unsustainable. He noted that the ....
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....ured on job work basis had been cleared, the lowest of such prices at which the 6 mm/ 6.5 mm M.S. Coils had been sold has to be regarded as normal price even if 6 mm/6.5 mm M.S. Coils are comparable to the goods manufactured and cleared on job work basis. He noted from the records that the assessee had sold 8 mm Tor steel also at their own factory gate during the month of March 1995. As such the value of 6mm Tor steel manufactured and cleared on job work basis during the month of March 1995 can be determined on the basis of the price at which 8mm Tor steel had been sold by the assessee at their factory gate. He also noted from the case records that the assessee had sold 8mm Tor steel during the month of March 1995 at Rs. 9,406/- per MT and therefore this should be regarded as normal price for the goods manufactured and cleared on job work basis if their value had to be determined on the basis of the price of comparable goods in terms of Sec. 4(1)(a) of the Act. He noted that the goods manufactured and cleared on job work basis is not less than Rs. 9,406/- Per MT during the month of March 1995. Therefore, he held that the proposal made in the show cause notice is not sustainable. He....
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....le is a sale to a class of buyers in terms of Sec. 4(1)(a) of the Act like sale through Depot of a manufacturer and hence the price of goods sold at factory gate cannot be adopted for goods sold through consignment agents even if the two sets of goods are comparable goods. Ld. Counsel submitted that the order passed by the Assistant Commissioner dropping the show cause notice by his order dated 30-12-96 was correct order and did not required to be reviewed by the Commissioner (Appeals) at the instance of the Department and should not have remanded the matter. He submitted that the subsequent Order-in-Original annexing new calculation sheet in the order was totally wrong. He submitted that the calculation annexed to Order-in-Original was never part of show cause notice and therefore the proceedings were beyond the show cause notice and it should be set aside. 5. Ld. SDR defended the order and submitted that the price originally raised was reduced and therefore the differential amount, which was adjusted towards the payment made is justified and the balance should be deposited by them. 6. On a careful consideration of the submission we find lot of merit in the submission made b....