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2023 (10) TMI 110 - CESTAT MUMBAIRecovery of differential duty - clearance of goods by job-worker - undervalued goods - alleged ‘less charging’ in the value of supplied inputs, and discharge of 1% on freight and 5% on unloading charges and 15% on profit and overheads - penalty on employees of company - HELD THAT:- Clearance of goods by the ‘job-worker’ merits valuation in the same manner that ‘captive consumption’ would and, relying upon ‘cost computation’, in the manner determined by the Hon’ble Supreme Court in UJAGAR PRINTS, ETC. ETC. VERSUS UNION OF INDIA AND OTHERS [1988 (11) TMI 106 - SUPREME COURT], does not preclude scrutiny of assessing authorities. The charge in the show cause notice is that ‘additional consideration’, as received by the ‘job-worker’, from the principal having paid the cost of transportation and other charges that, otherwise, would, ordinarily, have not been. No evidence has been placed on record to counter this allegation. Furthermore, no evidence has been adduced to suggest that the allegation of pricing as being below that of procurement cost was incorrect. Consequently, the costs involved in the transaction between the ‘job-worker’ and principal require addition to the declared value. That the procedure prescribed in rule 57F of Central Excise Rules, 1944 were followed cannot alter the excisability or mode of determination of value – such treatment is akin to ‘inputs’ having reached the ‘job-worker’ directly – as the same would have been included in the price at which an ‘independent manufacturer’ would have cleared the goods to the principal. The plea for the privilege of excluding these costs is not tenable. Levy of penalty on employees of company - HELD THAT:- Both are employees of the respective corporate entities and there is no evidence of any pecuniary benefit deriving to the two persons directly or indirectly. As ‘limbs’ of their respective employer organizations, they may have had a role in the price-setting but with penalizing of the corporate entities that derived the benefit, it would be improper to penalize the ‘limbs’ for vicarious responsibility. Appeal disposed off.
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