2004 (6) TMI 214

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.... 2. Textile processors are required to pay duty on the fabrics processed by them as processing is treated as manufacture. The duty being on ad valorem basis, payment of duty involves valuation of the processed fabrics. The law on valuation remains settled by the decision of the Apex Court in the case of Ujagar Prints Etc. Etc. v. Union of India & Others - 1989 (39) E.L.T. 493 (S.C.) wherein the Apex Court held that the value of the processed fabric consists of the value of the fabric received, the processing charges and the profit of the processor. The appellant has been following this principle while discharging duty on the fabrics processed by it. It has several clients. The present appeal is about the valuation of fabrics processed for ....

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....on 3 or a derived value (form M.R.P.) under Section 4A of the Act. During the hearing of the case, learned Counsel for the appellant pointed out that this distinction between cost and value is made clear by the Apex Court in the Pawan Biscuits Co. (Pvt.) Ltd. (supra) judgment. The learned Counsel has referred to Para 16 of the judgment in this case. That para reads as under :- "16. The present case is similar to Ujagar Prints case. In Ujagar Prints case, it was the grey cloth which was given to the processor whereas in the present case it was the raw material for the manufacture of biscuits given to the appellant. After the biscuits are made, they are given back to or are delivered under the instructions of Britannia. The appellant was e....