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2019 (12) TMI 636 - AT - Central ExciseMethod of Valuation - Job-work - clearance of ‘set-top-boxes’ - applicability of rule 6 or rule 10A of Central Excise Valuation (Determination of Price of Excisable goods) Rules, 2000 - Interpretation of statute - definition of ‘job-worker’ was intended to be interpreted for application of rule 10A of Central Excise Valuation (Determination of Price of Excise Goods) Rules, 2000. HELD THAT:- The issue of valuation of goods in the hands of ‘job-worker’ is one which is vexed the Tribunal and central excise authorities for long. It is obvious that in situations of the manufacture having been contracted out to specialists the declared value is not necessarily the base for determining the duty liability. The decisions, pertaining to job-workers and their excisability, and subsequently, the assessments, were rendered for the period before the Central Excise Tariff Act, 1985 came into force - The blurring of distinction between ‘job-worker’ and ‘principal manufacturer’, except for determination of commercial equation, reduced the valuation issues in the hands of principal manufacturer to conformity with ‘place of removal’. The belated interpolation of rule 10A in the said Rules also points out to the same want of definition. In effect, a ‘job-worker’ works on raw materials supplied by the ‘principal manufacturer’ and is denied an option to sell the goods that emerge thereby and, in that context, the liability fastened on to someone, other than the manufacturer, on the basis of contract of price. It is seen from the records that on a former occasion when the taxability of ‘set-top-boxes’ and non-inclusion of the value of material supplied therewith, rule 6 of the said Rules was held to be appropriate in accordance with rule 10A - The job-worker has been held to be a ‘manufacturer’ on behalf of ‘principal-manufacturer’ and the supply of inputs for goods by either the ‘principal-manufacturer’ or any other person authorized by him, to suffice as ‘job-worker’. The definition of ‘job-worker’, as incorporated in the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 would not cover the transactions, as well as the activities, that characteristic occur in the present dispute - Resort to rule 10A of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 is, therefore, not legal and proper. Appeal allowed - decided in favor of appellant.
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