TMI Blog2017 (10) TMI 333X X X X Extracts X X X X X X X X Extracts X X X X ..... that: - As per the proposition laid down in Ujagar Prints case, the appellants have to pay duty on the raw materials plus cost of conversion charges plus margin of profit. It does not say that the appellant can deduct the cost of raw materials when the scrap was returned to the principal - demand upheld. Penalty - Held that: - In the present situation, wherein there has been interpretation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scrap cotton yarn was returned to the principal and the appellants while paying the duty reduced the cost of raw materials proportionate to the value of the scrap returned to the principal from the cost of production. The department was of the view that the appellants have to apply the valuation laid down in Ujagar Prints case and therefore cannot deduct the value of scrap from the cost of raw ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on laid down in the case of Ujagar Prints. Since the scrap was returned to the principal, they deducted the value of the scrap from the cost of raw materials and paid duty accordingly. Since the appellants have returned the scrap to the principal, they are entitled to take into account the reduced cost of manufacture and thus the demand of duty is unsustainable. She also argued that there was no s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any merit in the contention raised by the appellant with regard to the demand of duty and the same is confirmed. However, the facts of the case, in the present situation, wherein there has been interpretation of the proposition laid down in the decision rendered in Ujagar Prints by the appellant, being merely a dispute of interpretation and the appellant having reduced the value of scrap returned ..... X X X X Extracts X X X X X X X X Extracts X X X X
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