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2013 (9) TMI 382 - AT - Central ExciseWhether the manufacturer of goods is Job-worker or not - Assessable Value under Rule 10A of the Valuation Rules 2000 - Whether the goods manufactured by INNOCORP and DART (the assessees) in terms of the “Contract Manufacturing Agreements” with TUPPERWARE and cleared to the latter’s godowns during the period from April, 2007 to February, 2008 were to be valued for the purpose of assessment of duty in terms of Rule 10A of the Valuation Rules, 2000 - Held that:- The subject goods should be shown to had been produced or manufactured by the assessees qua job workers on behalf of TUPPERWARE - the manufacturing activities carried out by the assessees under the relevant agreements constituted job work for TUPPERWARE who was sought to be presented as principal manufacturer - The appellant considers the assessees as job workers of TUPPERWARE - As per Explanation to Rule 10A, job-worker means a person engaged in the manufacture or production of goods on behalf of a principal manufacturer, from any inputs or goods supplied by the said principal manufacturer or by any other person authorized by him - The terms and conditions of the two agreements were undisputedly similar - The parties to the agreement declared that neither of them was an agent of the other, that their relationship was at arm’s length on a principal-to-principal basis, that neither of them had any interest in the other and that they had a buy-and sell relationship of the agreement - It was also declared that TUPPERWARE was the purchaser of the products manufactured by DART – The second conditions was also not satisfied. It was true that stringent quality standards were prescribed by TUPPERWARE to be strictly maintained by the manufacturers at every stage of the manufacture - TUPPERWARE could inspect the process of manufacture to ensure that the specified quality standards for the products were being maintained - They also had the liberty to reject the finished goods which did not conform to the specified standards - The things were part of normal commercial practice in respect of business houses who insist on the quality of their merchandise - These cannot be considerations to hold that the manufacturing activities of the assessees were under extensive control of TUPPERWARE reducing the status of the manufacturers to job workers. That the brand name of TUPPERWARE was affixed on the finished goods by the assessees was also immaterial - POONA BOTTLING CO. LTD. AND ANOTHER Versus UNION OF INDIA AND OTHERS [1981 (5) TMI 26 - HIGH COURT OF DELHI AT NEW DELHI]. The third condition also remains unfulfilled in the case - In the result, the respondents in these appeals were not manufacturing the subject goods as job workers “on behalf of” TUPPERWARE - Rule 10A was not applicable to the assessment of the subject goods - The third requirement for the assessees to be job workers of TUPPERWARE had also not been satisfied in this case inasmuch as the goods were not manufactured from any inputs supplied by TUPPERWARE or by any other person authorized by them - The suppliers were chosen by the assessees from a panel furnished by TUPPERWARE does not mean that the actual suppliers were authorized by TUPPERWARE to supply the materials to the assesses - Such materials were to be returned to TUPPERWARE - But the cost of these materials could be billed by the manufacturer to be paid by TUPPERWARE vide clause (11) of TUPPERWARE-DART agreement, which arrangement also reflected a seller-and-buyer relationship between the parties - Following COROMANDEL PAINTS LTD. Versus COMMISSIONER OF C. EX., VISAKHAPATNAM [2010 (9) TMI 315 - CESTAT, BANGALORE] The respondent can claim strong support from the decision of this Bench in Coromandel’s case - There was no merit in the grounds of the appeals.
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