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2015 (7) TMI 432 - AT - Central ExciseValuation of Glucon-D - Job work - whether job worker can be treated as related person and Job work charges are not at arm's length price - Clearance of Glucon-D on the basis of cost of raw-material received plus job charges plus the profit margin - revenue sought the duty on sales price of the goods - Held that:- A job worker and the principal manufacturer can be treated as related persons only when the terms of the job work are such that the job worker is not free to charge the job charges as per the market rate and the job charges are dictated by the principal manufacturer or that the terms of the agreement give unfair advantage to the principal manufacturer over the job worker which would indicate existence of extra commercial consideration and financial interest in the business of each other. On going through the terms of the agreement between the FHS & Heinz we do not find any such clause in the agreement. FHS & Heinz cannot be treated as related persons and accordingly the assessable value of the goods manufactured by FHS would have to be determined in accordance with the Apex Court’s Judgment in the case of Ujagar Prints and Ors. vs UOI [1989 (1) TMI 124 - SUPREME COURT OF INDIA] i.e. aggregate the cost of the raw material, job charges and job worker s profit and not the price at which the goods were being sold by Heinz form their depots and as such the judgments in the case of S. Kumars vs CCE [2005 (11) TMI 71 - SUPREME COURT OF INDIA] would not be applicable to the facts of this case. The impugned order is, therefore, set aside - Decided in favour of assessee.
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