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2016 (12) TMI 768 - CESTAT CHENNAIValuation - inclusion of notional interest on the deposits given to job workers - levy of duty - emergence of waste cotton in the course of manufacture - Held that: - It cannot be said that both parties to the contract had no knowledge of emergence of waste while fixing the job charges. It was well within their knowledge. This being one of the material fact value of the scrap generated is necessarily to be added to the assessable value of the job worked goods - On this count appellant fails to succeed. The second issue raised by appellant is that notional interest charges on the deposit received from the principal manufacturer has been computed by the authority below and added that to the assessable value, which is uncalled for and unwarranted since that has not influenced assessable value. Ld. DR at this stage points out that the advance was not on earnest money deposit but both parties agreed for utilisation of such deposit for capital expenditure to upgrade/renovate the machinery used for production of good and maintain quality of output manufactured for the principal manufacturer - Materials on record reveal that the financial assistance given by the principal manufacturer to the job worker appellant was to serve the above object. Therefore, the notional interest on the deposit has been rightly computed by the authority and added to the assessable value. The last count of the argument is that the amount received on account of fulfilment of hank yarn obligation is not includible in the assessable value. But Revenue has found out that the same is in relation to manufacture only. Authority below rightly adjudicated that the said receipt is includible in the assessable value. In absence of any cogent reason stated to disturb the findings of the authority, that part is confirmed. When order of the adjudicating authority does not bring out appellant’s contumacious conduct to cause evasion and in all issues question of law was involved, there shall be no penalty. Appeal disposed off - decided partly in favor of appellant.
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