TMI Blog2000 (6) TMI 294X X X X Extracts X X X X X X X X Extracts X X X X ..... had filed price list for both above two categories of Satranj manufactured. As far as Satranj manufactured on their account, appellant had declared the price list at which they sell the goods, to third party on principle to principle basis at factory gate. In respect of Satranj manufactured on job charges basis from the raw material received by M/s. Supreme Industries, the appellant filed price list along with Chartered Accountant certificate showing the cost of raw materials, manufacturing expenses of appellant including the profit margin of appellant and on the basis of Chartered Accountant certificate the price lists were being filed and approved by the Assistant Collector, (2) show cause notice was issued to appellant on 1-3-90 in respect of Satranj manufactured on job work basis that a real price under Section 4 would be the price at which such Satranj was sold in wholesale market by M/s. Supreme Industries and why this price should not also be made applicable for the goods manufactured by them from their own raw material being the saleable price. The appellant replied it on 31-3-90. Personal hearing was held. Shri Om Prakash representative of appellant appeared and argued th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actory premises of the appellant plus the job charges of the appellant including the manufactured cost of the appellant and also its profit . The appellant gets job charges from M/s. Supreme Industries Ltd. which include actual manufacturing cost and margin of profit of the appellant. Commissioner has held that job charges should be divided into manufacturing expenses and margin of profit of the appellant included in job charges should be made applicable to the entire cost of raw materials plus the expenses and thereafter only the assessable value; should be worked out, and the Central Excise duty should be paid on the said assessable values". Various Tribunal decisions have held that where the goods are manufactured on job work basis, the assessable value would be equivalent to the landed cost of raw materials in the factory premises of job worker plus job charges which include manufacturing expenses of job workers and the margin of profit of job workers . According to the Commissioner it is to be applied independently to the landed cost of raw materials plus manufacturing expenses of the job worker . Which means that the assessable value will have to be increased to the extent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e determined, as held by Commissioner (Appeals) i.e. "Value should include cost of raw material +value of lob work + manufacturing expenses and Profit, and not of cost of raw material + job charges as contended by appellant value of goods not confined to cost of raw material + job work, but will also constitute manufacturing expenses and manufacturing profit i.e. expenses and profit that manufacturer would get, if he chooses to sell the goods and manufacture the goods on his own, as per Asia Toabcco Ltd. v. Assistant Collector of Central Excise 1991 (53) E.L.T. 297 (Mad.) wherein petitioners were manufacturing cigarettes on behalf of M/s. ITC in which case, value would be one of which petitioners were deemed to be selling the goods manufactured by it, which is a question of fact to be determined by assessing officer. As per Ujagar Prints case Supreme Court decision while determining assessable value, conversion charges has to be included in the cost of raw material + manufacturing profit and expenses and nothing more. In no case trader's profit should be included. Manufacturing profit should not be ignored, which has a broader concept as compared to profit made on job charges. What ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt in the synopsis and Ujagar Prints orders of Supreme Court. Arguments of both sides are taken note of. The limited question involved in the Determination of Assessable on the goods manufactured by a job worker, on the raw materials supplied by actual customer, and the correctness of approval of price lists filed by appellant by the department. From the contention of both sides, it is seen that clarificatory judgment in Ujagar Prints case is the basis for it, which is the foundation of the development of case laws, in the rulings of Tribunal. So it is necessary to first counsel the said rulings before applying to the case on hand to decide the correctness or otherwise of impugned order. 8. 1989 (39) E.L.T. 493 (S.C.) in the case of Ujagar Prints Etc. Etc. v. Union of India and others dated 27-1-89 decided on the Miscellaneous application in Writ Petition No. 12133 of 1988 - Valuation-Profit-Post Manufacturing Profits-Traders Profit being post-manufacturing profit not includible-Section 4 of Central Excise Act (para 2) valuation of goods produced on job work basis-processing of fabrics-Assessable value to include cost of material, processing charges, and profit of processor, but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ork - Profit element in Job work charges-Value declared by job worker includes profit element unless department puts a case that any amount was collected from buyer as profit over and above job charges. Section 4 of the Central Excise Act, (para 2). Now, the present appeal is considered below in the light of the general principles laid down in the above rulings. 9. From the above paras, it is seen that the discussion and findings in the order-in-original and impugned order as to the evaluation of assessable value of goods manufactured on job work basis does not find support from the rulings of Ujagar Prints clarificatory judgment. Valuation of goods produced on job work basis-processing of fabrics-Assessable value to include cost of material, processing charges and profit of processor, but traders profit customers profit who got the goods processed) not includable being post manufacture profit. If the trader gives declaration to the processor about the price at which he would be selling the processed goods in the market such declared price will be the assessable value provided it included only the price at which the processed goods would leave the processors factory + processors ..... 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