9911796707
TMI Blog2003 (7) TMI 365X X X X Extracts X X X X X X X X Extracts X X X X ..... by two of the appellants viz. M/s. Special Prints Ltd. and M/s. Garden Silk Mills Ltd. The bare facts relevant for the purpose of disposal of these appeals are as under : During the period April, 1993 to March, 1998, M/s. Special Prints Ltd., Surat on job work basis, processed grey man-made fabrics supplied by M/s. Garden Silk Mills Ltd., Surat and cleared the processed fabrics to M/s. Garden Silk Mills Ltd. on payment of Central Excise duty. The show cause notice alleged that the two companies were related persons in terms of Section 4(4)(c) of the Central Excise Act and, therefore, M/s. Special Prints Ltd. should have paid duty on the processed fabrics in terms of the wholesale price at which the goods were sold by M/s. Garden Silk Mill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cated two firms namely M/s. Garden Associates and M/s. Vareli Associates for their alleged involvement by way of transportation of the processed fabrics of M/s. Garden Silk Mills Ltd. and accordingly, proposed imposition of penalties on them under Rule 209A ibid. It was also alleged in the notice that four trucks belonging to Shri Alla Bax Mohd. Shaikh, Proprietor of Adnan Roadlines, New Agra Road, Mumbai, which were used for transportation of the processed fabrics of M/s. Garden Silk Mills Ltd., were liable to confiscation. A penalty was also proposed to be imposed on Shri Alla Bax Mohd. Shaikh under Rule 209A ibid. 2. The allegations in the show cause notice were denied by the parties. The Commissioner, in the impugned order, confir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 56 (S.C.)]. 4. We have carefully examined the submissions. The differential duty of over Rs. 21 crores confirmed against M/s. Special Prints Ltd. by the adjudicating authority is on the fabrics processed by them on job work basis and cleared to M/s. Garden Silk Mills Ltd. The Commissioner has found these two companies to be "related persons" in terms of Section 4(4)(c) of the Central Excise Act and, on this basis, held that duty should have been paid on the processed fabrics by M/s. Special Prints Ltd. (job worker) on the basis of the wholesale price at which M/s. Garden Silk Mills Ltd. subsequently sold the goods to their wholesale dealers. The Commissioner took the view that, on account of the relationship which he found between M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Ujagar Prints was not applicable. However, we do not think that it is necessary in this case to examine the question whether M/s. Special Prints Ltd. and M/s. Garden Silk Mills Ltd. are related persons in terms of Section 4(4)(c) of the Central Excise Act inasmuch as this Tribunal has, in the case of S. Kumars (supra), held that in the valuation of fabrics processed by a job worker and cleared to a trader who supplied grey fabrics for the job work, the ratio of the judgment of Apex Court in Ujagar Prints will be applicable irrespective of whether the trader and job worker are related. This decision in S. Kumars has been followed with approval by the Tribunal's Larger Bench in the case of Prafful Industries (supra). We also find that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n job work basis and cleared the same to M/s. Britannia Industries Ltd. Accordingly, M/s. Special Prints Ltd. were not liable to include, in the assessable value of the processed fabrics cleared to M/s. Garden Silk Mills Ltd., any profit or expenses incurred on the part of the latter. The assessable value of the processed fabrics for the purpose of payment of Central Excise duty by M/s. Special Prints Ltd. would include only the cost of raw material supplied by M/s. Garden Silk Mills Ltd. and the processing charges and other expenses and profit of the former (job worker). The same would be the position with regard to the assessable value of the texturised POY cleared by M/s. Garden Silk Mills Ltd. (as job worker) to M/s. Special Prints Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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