TMI Blog1997 (12) TMI 595X X X X Extracts X X X X X X X X Extracts X X X X ..... d the findings of the adjudicating authority. In brief the facts of the case are that the appellants manufacture talcum powder on the orders placed by Ponds India Ltd (PIL). This manufacture is under an agreement and the entire production is cleared to the PIL. The duty on the talcum powder is discharged as per the value indicated in the purchase order. It is the case of the department that the transaction between the appellants and the PIL is not at arms length. Therefore the price adopted is wholesale price of M/s. PIL. 3. It was contended by the appellants before the CCE (A) that the goods sold by them to PIL represented the normal price under Section 4(1)(a) of the CEA 1944. It was also contended by the appellants before the CCE (A) that in terms of the previous order passed by the adjudicating authority it was not open to re-open the assessment. It was pointed out by the learned Sr. Counsel that in the previous case the CCE (A) on similar agreement held that transaction value of the appellant is the correct assessable value. It was also pointed out that the present agreement on which the CCE (A) relied upon is similar in nature to the agreement which was considered by the CC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if fresh facts are available to the department or some new decisions have come into effect in this regard. He pointed out that the previous order of the CCE (A) was on the basis of the agreement entered into by the appellants as well as the PIL. The same agreement existed during the previous period also; hence it was contended that there are no fresh circumstances which warranted the adjudicating authority to take a different view and that being so, on the similar set of evidence, the matter could not have been re-opened. In this connection, he relied upon the decision of the Hon ble Supreme Court in the case of Kamala Finance Corporation reported in 1991 (55) E.L.T. 433. In this connection he also placed reliance on the decision of the Hon ble Madras High Court reported in 1995 (77) E.L.T. 529 in the case of Bush Boake Allen India Ltd. v. U.O.I. Relying on this decision it was contended before us that no doubt, in taxation matters principles of res judicata will not apply. But the learned Counsel contended that the decision of the Appellate Collector rendered in appeal in the year 1992 which was judicial one cannot be changed by the executive AC in the subsequent order without any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. In that particular case, it was held by the Hon ble Supreme Court that the decision of the CCE (A) is binding on the AC. But in this case the proceedings under which the CCE (A) passed the order in 1992 is different proceedings. In the latter case, AC was considering the assessable value with reference to the latter period. 7. In this connection the decision of the Hon ble Supreme Court in the case of M/s. Jain Exports and another v. U.O.I. reported in 1992 (61) E.L.T. 173 (S.C.) = 1988 (17) ECR 631 (S.C.)] becomes relevant. In that particular case, in Paras 9 and 11, their Lordships held as follows : 9. Massive arguments were built up by learned counsel for the appellants on the basis that the decision of the Central Board and the Central Government rendered in similar matters were binding on the collector and he could not have acted to the contrary. Several precedents have been cited during the hearing. In a tier system, undoubtedly decisions of higher authorities are binding on lower authorities and quasi-judicial Tribunals are also bound by this discipline. 11. That, however, does not assist the appellants at all. It may be that the Collector of Customs should have fe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e not the result of a quasi-judicial adjudicatory process. Even otherwise, according to the learned Senior Standing Counsel, orders of authorities and the Tribunal cannot be equated to precedent. Further, one order cannot be judged with reference to the earlier or later order. It will be that the impugned order is a right order and the earlier order or the latter order is wrong, and that each order has to be judged according to its own facts and circumstances and the provision of law in force at the time. It is the specific case of the respondents in Paragraph 6 of the counter affidavit that the earlier order is bad. 9. It is also seen that in that particular case, their Lordships referred to the decision of the Hon ble Supreme Court reported in 1995 (1) SCC 745 wherein at Para 8 it was held as under : 45. In 1995 (1) S.C.C. 745, the Supreme court has held in Paragraph 8 as follows : We are of the opinion that the basis or the principle, if it can be called one, on which the writ petition has been allowed by the High Court is unsustainable in law and indefensible, in principle. Since we have come across many such instances, we think it necessary to deal with such pleas at a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enquire into the correctness of the order made or action taken in another person s case, which other person is not before the case nor is his case. In our considered opinion, such a course barring exceptional situations would neither be advisable nor desirable. In other words, the High Court cannot ignore the law and the well-accepted norms governing the writ jurisdiction and say that because in one case a particular order has been passed or a particular action has been taken, the same must be repeated irrespective of the fact whether such an order or action is contrary to law or otherwise. Each case must be decided on its own merits, factual and legal, in accordance with relevant legal principles. The orders and actions of the authorities cannot be equated to the judgments of the Supreme Court and High Courts nor can they be elevated to the level of the precedents, as understood in the judicial world. It is thus seen that the Tribunal, cannot ignore the law and the well accepted norms that assessable value is to be determined in accordance with the law and the principles laid down by the Hon ble Supreme Court in the latter decision. What is to be seen is that whether the impugn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )(a). It was therefore, contended that in this case, invocation of Section 4(1)(b) is not correct. It was pointed out that it is only where the normal price of delivery of the goods is not ascertainable for the reason that such goods are not sold or for any other reason, nearest ascertainable equivalent value thereof is required to be determined. It was, therefore, pointed out that there was price available for which the goods were sold to PIL and thus the sale is deemed to be factory gate sale of the appellants. He pointed out that the CCE (A) erred in interpreting the recitals of the agreement. It was pointed out that the CCE (A) has misread the meaning and the scope of Clause 3 of the agreement. He drew our attention to the above clause and pointed out that this requirement with reference to the specification and quantum is only to ensure the quality aspect of the product. The quantity referred to in Clause 3 refers to the quantity of the finished product. He also pointed out that the findings of the CCE (A) that Clause 4 and 17(c) of the agreement is restrictive in nature is erroneous. In this connection he pointed out that since the products are manufactured for sale only to P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O.I. v. Cibatul Limited 2. 1985 (22) E.L.T. 306 (S.C.) in the case of U.O.I. v. Godfrey Philips India Ltd. and others. 3. 1990 (47) E.L.T. 62 (Tribunal) in the case of Kerala State Electricity Board v. C.C.E. 4. 1995 (75) E.L.T. 257 (Guj.) in the case of Prolite Engineering Co. v. U.O.I. 5. 1995 (75) E.L.T. 266 (Kar.) in the case of Wipro Infotech Ltd. v. CEGAT 6. 1984 (17) E.L.T. 323 (S.C.) in the case of U.O.I. v. ATIC Industries Ltd. 7. 1984 (17) E.L.T. 329 (S.C.) in the case of U.O.I. v. Bombay Tyre International Pvt. Ltd. 8. 1989 (41) E.L.T. 368 (S.C.) in the case of U.O.I. v. Playworld Electronics Pvt. Ltd. 9. 1989 (41) E.L.T. 374 (S.C.) in the case of C.C. v. Krishna Sales Pvt. Ltd. 10. 1993 (67) E.L.T. 83 in the case of Nestler Boilers Pvt. Ltd. v. C.C.E. 11. 1993 (67) E.L.T. 95 in the case of Nevichem Synthetic Industries Pvt. Ltd. v. C.C.E. 12. 1985 (22) E.L.T. 324 (S.C.) in the case of Joint Secy U.O.I. v. Food Specialities Ltd. 13. 1986 (26) E.L.T. 881 (S.C.) in the case of Sidhosons Anr. etc. etc. v. U.O.I. 14. 1986 (26) E.L.T. 882 in the case of Mahendra Electricals Ltd. v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supreme Court has held as follows : It may be noticed that the respondent manufactures the goods according to the specifications supplied by Nestle s and affixes the trade marks of Nestle s on the goods and supplies the same to Nestle s at a wholesale price free on rail at Moga or free on lorry at factory stipulated under the agreements with Nestle s. What are sold and supplied by the respondent are goods manufactured by it with the trade marks affixed to them and it is the wholesale price of such goods that must determine the value for the purpose of assessment of excise duty. It is immaterial that trade marks belong to Nestle s. What is material is that Nestle s have authorised the respondent to affix the trade mark on the goods manufactured by it and it is the goods with the trade marks affixed to them that are sold by the respondent to Nestle s. There can therefore be no doubt that the wholesale price at which the good with the trade marks affixed to them are sold by the respondent to Nestle s as stipulated under the agreements would be the value of the goods for the purpose of excise duty. That is the price at which the respondent sells the goods to Nestle s in the course o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rules and regulations. He also pointed out that as per Clause 9, it is the responsibility of the appellants to keep all the formulations and ingredients and specifications communicated to the appellants by PIL as business secrets and as per Para 10 of the agreement it was pointed out that the appellants shall not sub contract or delegate any other person, Co., whole or any part of the manufacture of the aforesaid product with the said brand name without permission of PIL. It was also mentioned that in Clause 12 of the agreement that at no time the appellants should advertise that it was engaged in the production of products to be sold by PIL. As per Para 15, he pointed out that the appellants shall not manufacture or produce either for themselves or for third parties any of the aforesaid product either during or after termination of this agreement based on the formulations of PIL which may be communicated to the appellants by PIL in pursuance of this agreement. He also pointed out that as per Clause 17 of the agreement, the appellants shall discontinue the manufacture and production of any other similar products and all documents and labels are to be returned to PIL. He also point ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eferred to supra and distinguished the same on account of the fact that in that case the assessee can sell the rejects to others or even dispose the goods if they were not accepted by the buyer. It was therefore, concluded by him that the goods do not belong to the buyer. He was of the view that in view of the various clauses which he had discussed in the order i.e. Clauses 3, 4, 6 and 15 there are various restrictions on the appellants. Therefore, the transactions are not at arms length. Again in Para 17 of the impugned order, he stated that PIL may not be related person but the evidence brought out reveals that the price at which the goods are sold does not represent the wholesale price in the normal wholesale transactions as required under Section 4(1)(a) of the CEA 1944. Therefore, he pointed out that recourse has to be taken for determining the price under Section 4(1)(b) and the valuation rules in force. In Para 18, he held that the overall analysis of the agreement reveals that there is more than what meets the eye. Therefore, he drew inference that it is not a principal to principal transaction though these words find specific mention in Clause 6 of the agreement. 18. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etermined in such manner as may be prescribed. (2) Where, in relation to any excisable goods the price thereof for delivery at the place of removal is not known and the value thereof is determined with reference to the price for delivery at a place other than the place of removal, the cost of transportation from the place of removal to the place of delivery shall be excluded from such price. It is, therefore, seen that a reading of Section 4 shows that where duty of excise is chargeable on excisable goods with reference to their value, the normal price at which such goods are sold would be deemed to be the value of such goods subject to other provisions of Section 4. Further, the normal price means price at which such goods are ordinarily sold by the assessee to a buyer in a normal course of wholesale trade for delivery at the time and place of removal. If however, the buyer is a related person and the price is not the sole consideration for sale and the price cannot be treated as normal price . In case of sale to or through related person the normal price would be as provided for under proviso (iii) to Section 4(1). It is therefore, seen that where the assessee generally ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... length. In this connection it is seen that as per Clause 3, it is stated that the appellants will have to make their own arrangements to purchase and procure all the raw materials, components, containers etc. for the purpose of manufacture of the finished products. It was also the responsibility of the appellants to arrange and procure containers and other packing materials in conformity with the specifications of PIL and to obtain written approval of such design art works etc. before of finalizing and using such packing material for packing the finished products. Therefore, the responsibility for procurement of inputs and the packing materials is on the appellants and they have to obtain written approval of the design work. This goes to show that buyer does not want to take this responsibility and it only shows that in order to keep the quality, the approval of the design work is required. There is nothing in the clause to show that the transaction is not on principal to principal basis. On the contrary this clause shows that the appellants are expected to do their work as per the specifications of the buyer and the whole burden is on them to do so. Clause 4 of the agreement shows ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arks affixes on them to the buyer. 8. The appellant has invited our attention to certain observations in Union of India v. Delhi Cloth and General Mills - 1977 E.L.T. (J 199) (S.C.) = (1963) Supp. 1 SCR 586 at 592 and 598, South Bihar Sugar Mills Ltd., etc. v. Union of India and others [1978 (2) E.L.T. (J 336) (S.C.)=1968 3 SCR 21 at 31], Union of India and others v. Free India Dry Accumulators Ltd.- 1983 Excise Law Times 733 at 734 and Union of India and others etc. etc. v. Bombay Tyres International Ltd. etc. etc.- 1983 (14) E.L.T. 1896 (S.C.) but in none of those observations do we find any acceptable support for the proposition that the goods are manufactured by the seller on behalf of the buyer. 9. In the result, we hold that the High Court is right in concluding that the wholesale price of the goods manufactured by the seller is the wholesale price at which it sells those goods to the buyer, and it is not the wholesale price at which the buyer sells those goods to others. Applying the principles of that case to this case it is seen that the appellants by using their own plants, machinery, raw materials and labourers manufacture the goods under the agreement and sell th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngredients as business secrets and shall not be disclosed to any other person. This also is in conformity with the usual agreement and we see no reason as to how can it be termed as one which is not on principal to principal basis. Clause 10 only states that the appellants shall not sub-contract or delegate to any other person or persons for the manufacture of the products and these are normal clauses as these are formulations which are to be kept in secret and the PIL wanted to see that these secrets are not transferred to any other person by the appellants. This clause is only an extension of Clause 9 which shows that formulations and specifications are to be kept as secrets. Clause 11 only states that it is the responsibility of the appellants to comply with the requirements of law applicable to the manufacture, packing etc. and supply of finished products manufactured by the appellants. 25. Clause 12 states that the appellants shall not at any time during the substance of this agreement or any item after its termination, advertise in any manner whatsoever by publication or by visual representation in its letter pads etc. that the appellants were engaged in the production of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roducts as per their formulations and specifications and return the documents with respect to these formulations and specifications along with other technical information and the finished products meeting the quality formulations and specifications in the possession of the appellants have to be sold to PIL and the other products which are not meeting the quality specifications will be disposed of on mutual agreement. Therefore, there must be mutual agreement between the parties for disposal of the items which are not meeting the quality specifications of the PIL. This shows that the relationship is on principal to principal basis. In case of any difference, the matter has to be referred to an arbitrator acceptable to both the sides. This again goes to show that arbitrator acceptable to both the sides alone can hear the difference which means each party is equal so far as this right is concerned. The restrictions on appellants are to ensure the quality of the products to keep the formulations and technology as secret. Therefore, on a close analysis of the agreement, it cannot be said that the transaction is not at arms length. 26. In similar circumstances, the Hon ble Supreme Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... how the value of the trade marks could be added to the wholesale price for the purpose of determining the value of the goods for the purpose of levy of excise duty. Therefore, the above facts clearly cover the present issue and the decision rendered by three learned judges clearly applies to the facts of this case in view of the fact that the agreement in sum and substance which are concerned in this case tally with the agreement in that case. It is also seen that similar case came up before the Hon ble Supreme Court in the case of Union of India v. Playworld Electronics Pvt. Ltd. reported in 1989 (41) E.L.T. 368. In that case, the Hon ble Supreme Court referred to the decision in the case of Cibatul reported in 1985 (22) E.L.T. 302 which was referred to supra. In that case, the Hon ble Supreme Court took note of the facts which are as follows : For appreciating how the wholesale price could be the basis of the determination of the assessable value, a reference may be made to the decision of this Court in Union of India and Others v. Cibatul Limited [1985 (22) E.L.T. 302 (S.C.); 1985 Supp. 3 SCR 95]. In that case, the respondent, Cibatul Ltd. entered into two agreements wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore us. The orders of the Central Government were challenged under Article 226 of the Constitution. The High Court held that the goods were manufactured by the seller as its own goods, and therefore, the wholesale price charged by the seller must form the true basis for the levy of excise duty. On appeal, this Court held that the High Court was right in concluding that the wholesale price of the goods manufactured by the seller was the wholesale price at which it sold those goods to the buyer, and it was not the wholesale price at which the buyer sold those goods to others. The relevant provisions of the agreements and the other material on the record showed that the manufacturing programme was drawn up jointly by the buyer and the seller and not merely by the buyer, and that the buyer was obliged to purchase the manufactured product from the seller only if it conformed to the buyer s standard. For this purpose, the buyer was entitled to test a sample of each batch of the manufactured product and it was only on approval by him that the product was released for sale by the seller to the buyer. It was apparent that the seller could not be said to manufacture the goods in those fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the background of the facts found we, however, need not get ourselves bogged with the controversy as to judicial approach to tax avoidance devices as was pointed out in McDowell and Co. Ltd. v. Commercial Tax Officer - 1985 (154) ITR 148, where this Court tried to discourage colourable devices. It is true that tax planning may be legitimate provided it is within the framework of the law. Colourable devices cannot be part of tax planning and it is wrong to encourage or entertain the belief that it is honourable to avoid the payment of tax by dubious methods. It is the obligation of every citizen to pay the taxes honestly without resorting to subterfuges. It is also true that in order to create the atmosphere of tax compliance, taxes must be reasonably collected and when collected, should be utilized in proper expenditure and not wasted. [See the observations in Commissioner of Wealth Tax v. Arvind Narottam - 1988 4 SCC 113]. It is not necessary, in the facts of this case to notice the change in the trend of judicial approach in England : [Sherdeley v. Sherdeley (1987) 2 AER 54]. While it is true, as observed by Chinnappa Reddy, J. in McDowell and Co. Ltd., v. Commercial Tax Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ladies and they did not go to the factory premises of the respondents. No doubt the sale proceeds went to the respondents but that will not change the character of manufacture. If the conclusion is that the house-hold ladies were the real manufacturers then the decision of the Tribunal cannot be faulted. CEGAT after considering the materials before it concluded that the respondents are not the manufacturers of agarbati, amlapodi, dhup etc.. manufactured by various cottage type manufacturers on job work basis. On the facts narrated above, we do not think that the assumption of the Collector that the respondents got the goods in question manufactured by hired labourers can be sustained. On the other hand we find, on the facts, the house-hold ladies are the manufacturers of the goods in question and the liability to excise duty will be attracted on their manufacture of the goods and therefore, it cannot be clubbed with the goods manufactured in the factory premises of the respondents to deny the exemption claimed. On the analogy of the above said decisions, it is clear that it is the appellants who are the manufacturer in this case. 30. Reliance has been placed by the Sr. Couns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der. It was held that the Ujagar Prints case judgment reported in 1988 (38) E.L.T. 535 = 1988 (19) ECR 578 (SC) = ECR C 1281 SC was not attracted to the facts of the case. This decision was followed by another Bench of the Tribunal in M/s. Azad Biscuits Co. (P) Ltd. Anr. v. C.C.E. Appeal No. E/1264/91-A E/3313/92-A (Final Order No. 100 and 101/95-A). It cannot be that in the above cases the Tribunal purported to go against the dictum laid by the Supreme Court. Reading of the two decisions clearly indicates that in the opinion of the Tribunal in the fact-situation of the cases the supplier and the processor were not in the position of principal and principal but were in the position of principal and agent. Such is not the position in the present appeal, which is, therefore, clearly governed by the dictum in the clarificatory order in the Ujagar Prints case in 1989 (39) E.L.T. 493 = 1989 (21) ECR 1 (S.C.) = ECR C 1347 S.C. It is unnecessary for the purpose of this case to consider the correctness of the earlier decision of the Tribunal even in the context of principal and agent relationship. It is therefore, seen that the assessable value of the goods will be value at which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lying upon the ratio in Cibatul case, the Supreme Court held in Play-World Electronics case that the burden is on the Department to establish that the transactions between the assessee and the brand name owner was not on principal to principal basis. In reiterating the test, the Supreme Court observed that any decision by the Department should be based on a correct appreciation of the relationship between the manufacturer and the brand name owner and the several clauses of the agreement and other relevant circumstances. It was therefore held in both the cases referred to above that the Department was not justified on facts in directing that the value adopted by the brand name owner should be taken as the value of the manufacturer for the purpose of demanding differential duty. The Hon ble High Court of Karnataka has taken note of the decision of the Hon ble Supreme Court in the case of Cibatul reported in 1985 (22) E.L.T. 302 and in the case of Playworld Electronics Pvt. Ltd. reported in 1989 (41) E.L.T. 368 (S.C.) while holding as above in Para 12 extracted above. 32. This goes to show that for the correct appreciation of the relationship between the manufacturer and the buye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supply of the finished product to the buyer. Paras 5 7 of the High Court decision are reproduced below : The agreement between the petitioners and the Union Carbide is produced on record at Ex. A to the petition, Clause 7 of this agreement provides that any taxes levied or duties including sales tax and excise duty shall be paid by the Company. Clause 8 of the agreement provides for price adjustment and the price agreed between the parties could be increased if there is any increase in excise duty or in the import duty on stainless steel. Part B of clause 8 provides that the price of the product will be reviewed every year, while Part C of the clause provides that if any difficulty in obtaining raw-materials within the country arises and the petitioners are required to import the raw-materials, then any premium paid for procuring import entitlement shall be reimbursed by the Company, Clause 12 of the agreement provides for short delivery, rejection and replacement of the product and that indicates that the petitioners were not the agents of the Company but were independent manufacturers. From the terms of this contract, I have no hesitation in holding that the petitioners were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he definition of wholesale dealer occurring in Section 2(k) of the Central Excises Salt Act, 1944. This definition is as follows : Wholesale dealer means a person who buys or sells excisable goods wholesale for the purpose of trade or manufacture, and includes a broker or commission agent who, in addition to making contracts for the sale or purchase of excisable goods for others, stock such goods belonging to other as an agent for the purpose of sale. 11. This definition, which is an inclusive definition, is of wider scope and it will be reasonable to interpret the term wholesale trade occurring in Section 4(4)(e) of the Act alongwith this definition of wholesale dealer and it is to be applied in interpreting Section 4 also because there is nothing to show that this definition would be repugnant to provisions in the determination of assessable value under Section 4. When so viewed, the term wholesale dealer has to be given a wider interpretation to include bulk purchases and in such a view of the matter, the Department s contention that TOMCO in the facts of the present case are not wholesale dealers does not have much force. In the result, on a total consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ept M/s. Ponds (I) Ltd. In other words, they are not freely available to all the wholesale dealers. Therefore, the sale is not at arms length. 4. Whereas it appears that as the normal price cannot be determined under Section 4(1)(a) of the Central Excises and Salt Act, 1944 recourse has to be taken to the Valuation Rules 1975 for determining the assessable value. In the instant case, Rule 6 b(i) of Central Excise Valuation Rules would be relevant according to which value has to be determined on the basis of value of comparable goods. In this case, the comparable goods are sold from the depots of M/s. Ponds (I) Ltd., to the wholesale dealers. 5. Now, therefore M/s. J.B. Advani Co. (Mys.) Ltd. are required to Show Cause to the Assistant Collector of Central Excise, V Division, No. 161, Sashadripuram, Bangalore - 560 020 as to why : (i) the value at which comparable goods are sold from the depots of M/s. Ponds (I) Ltd. should not be taken for the purpose of assessment, and (ii) the differential duty of Rs. 2,03,35,512.69 for the period from November, 94 to April, 95 on Dream Flower Talc and Sandal Talc (details as per Annexure enclosed) arising due to redetermination of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the conclusion as to which order is correct. 38. It is now seen that the decision of the Hon ble Supreme Court in the case of Ujagar Prints etc. v. U.O.I. in the clarificatory order reported in 1989 (39) E.L.T. 493 (S.C.) squarely applies to the facts of this case. In that case the Hon ble Supreme Court held as follows : [Order]. - In respect of the civil miscellaneous petition for clarification of this Court s judgment dated 4th November, 1988, it is made clear that the assessable value of the processed fabric would be the value of the grey cloth in the hands of the processor plus the value of the job work done plus manufacturing profit and manufacturing expenses whatever these may be, which will either be included in the price at the factory gate or deemed to be the price at the factory gate for the processed fabric. The factory gate here means the deemed factory gate as if the processed fabric was sold by the processor. In order to explain the position it is made clear by the following illustration : if the value of the grey-cloth in the hands of the processor is Rs. 20/- and the value of the job work done is Rs. 5/- and the manufacturing profit and expenses for the proces ..... X X X X Extracts X X X X X X X X Extracts X X X X
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