1999 (10) TMI 342

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..... r grey yarn from their factory to their depots. In the case relating to Malwa Cotton and Spg. Mills, the period with which we are concerned is from March, 1994 to March, 1995. In the case of other appellant, i.e., M/s. Nahar Fibre Ltd., the period is from March, 1994 to August, 1994, though they are covered by two Show Cause Notices for March, 1994 to June, 1994 and July to August, 1994 resulting in two orders by the adjudicating authority and two appellate orders. During above mentioned periods, nearly 95 per cent of the produce, namely, grey yarn were sold to wholesale dealers. Nearly 5 per cent were sent to job workers for dyeing. From the job workers the dyed yarn is received back. They were subsequently sold to other dealers. In the ca .....

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..... me of removal was grey yarn. It was not subjected to the process of dyeing. When such yarn is cleared by the appellants from their factory, they are excisable goods and the cost of dyeing incurred subsequently cannot be added to its value for assessing the duty on it. Grey yarn cleared from appellant's factory are taken by job workers for dyeing. Even if the process of dyeing involves manufacture, the job worker is carrying on the manufacturing process. So, that job worker alone is to be made liable for duty on that manufacturing process. This is the principle stated by the Supreme Court in Ujagar Prints [1988 (38) E.L.T. 535 (S.C.)]. Unfortunately, that issue has not been approached by the authorities below in the manner dealt with by Cour .....

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..... same. Whatever be its description, the manufacturer is entitled to its deduction. Reference was made to the Supreme Court decision in U.O.I. v. Bombay Tyres International [1984 (17) E.L.T. 329]. According to their Lordships, discount allowed in the trade by whatever name it is called, such discount as described should be allowed to be deducted from the sale price. 1.5 to 2 per cent was being allowed by the appellant, M/s. Malwa Cotton Spg. Mills, to its dealers. Such trade discounts, even if it was described as trade commission or cash discount, should be deducted in finding out the assessable value. On going through the records, we find that neither the adjudicating authority nor the appellate authority attempted to find out the actual amo .....

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