9911796707
TMI Blog2004 (3) TMI 454X X X X Extracts X X X X X X X X Extracts X X X X ..... 8,603/- under Section 11A of Central Excise Act. He also demanded interest at the rate of 20% per annum under Section 11AB of the Act. He did not impose any penalty on the appellants. 2. The appellants are the manufacturers of yarn falling under chapter Heading No. 55 of CETA. They entered into on agreement with M/s. Anantpur Cotton Mills, Tadipatri (a job worker) for manufacture of cotton yarn of different counts. As per condition of the agreement, the appellants declared the sale price of the product to the department for the purpose of valuation of goods at the time of clearing the said goods. They also stated that in case any difference in the declared price and the actual sale price was noticed, the appellants would be held respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the appellants by the Superintendent demanding differential duty to the tune of Rs. 13,60,449/- for the period May, 97 to September, 97, October, 97 to March, 98, April, 98 to July, 1998, on the basis that the appellants instead of going to the method of comparable goods for payment of excise duty, adopted cost-production approach for determination of assessable value, which is defective and resulted in lowering the assessable value. The department alleged that goods were removed to depots on stock transfer basis without the knowledge of the department. Hence, there is suppression of facts. Reduction in landing cost of raw material, was also alleged in the SCNs. The appellants replied to the said SCNs, on 23-3-98, 9-6-98 and 13-11-98. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cost of raw material and the job-charges. He also placed reliance on the following case laws : 1. Ultra Lubricant (India) (P) Ltd. v. CCE, Mumbai -- 2002 (150) E.L.T. 580 (Trib.) 2. Marcandy Prasad Radhakrishna Prasad Pvt. Ltd. v. CCE, Calcutta-II -- 1998 (102) E.L.T. 705 (Trib.) 3. Hyderabad Cylinders Pvt. Ltd. v. CCE, Hyderabad -- 2003 (157) E.L.T. 466 (Trib.) 4. M.R. Plastics Polymers (P) Ltd. v. CCE, Hyderabad -- 2000 (124) E.L.T. 934 (Trib.) 5. In the end, the appellants have requested to set aside the impugned order (dated 9-3-2000) and allow their appeal with consequential relief of refund of duty and interest already paid by the appellants before filing this appeal. 5. I have carefully gone through the case records and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rials, labour charges and profit in accordance with Ujagar Prints [(1989 (39) E.L.T. 493 (S.C.)] upheld". 7. The Hon'ble Tribunal in the case of Hyderabad Cylinders (P) Ltd. v. CCE, Hyderabad reported in 2003 (157) E.L.T. 466 (Trib. - Bang.), has held - "Job work valuation cannot be decided by comparison with goods produced on own account and sale value of scrap not to be included once again, matter remanded for determination of duty after considering costing data." 8. In addition to above case laws, I find that the matter regarding valuation of goods manufactured on job work basis was examined by the Board and the Hon'ble Board vide it's Circular No. 619/10/2002-CX., dated 19-1-2002, has clarified as under : "The matter has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 19-1-2002, I find that the appellants have correctly followed the law regarding valuation of goods manufactured on job-work basis. The contention of the department that costing method is not applicable and the valuation of the goods should be done on the basis of price of comparable goods (minus the colouring charges) is contrary to the legal provisions. The said contention is not sustainable. The adjudicating authority has also not agreed with the contentions of the Superintendent. He has accepted the valuation done under Rule 6(b)(ii) of Valuation Rules, by the appellants. This is clear from the findings recorded at page 4 of the impugned order. The Hon'ble Board, had also clarified the position earlier vide Circular No. 251/85/96-CX ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... There is no legal basis for adopting this course of action by the department. I, therefore, hold that the order is not legal and proper and the same is liable to be set aside. I find that M/s. Bhoruka Textiles Ltd., Dharwad, the appellants in the present appeal are not registered with Central Excise Department at Ananthapur Division. If any duty was to be demanded from them, the jurisdictional officer had to demand the same. In the instant case the correct procedure was not followed by the department. For the above reason, also the demand is not sustainable. The job-worker namely M/s. Anantpur Cotton Mills, Tadipatri, who did the job-work for M/s. Bhoruka Textiles Ltd., Dharwad, were not served with a show cause notice for payment of differ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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