TMI Blog2010 (6) TMI 383X X X X Extracts X X X X X X X X Extracts X X X X ..... d P. Karthikeyan, Member (T) REPRESENTED BY : Shri M.S. Nagaraja, Advocate, for the Appellant. Shri U. Raja Ram, JDR, for the Respondent. [Order per : P. Karthikeyan, Member (T)]. - This appeal filed by M/s. Campco Chocolate Factory seeks to set aside the impugned order of the Commissioner of Central Excise (Appeals). Vide the impugned Order, the Commissioner (Appeals) upheld the order of the Original Authority confirming differential duty of Rs. 1,60,747/- along with applicable interest against the appellant and imposing equal amount of penalty under Section 11AC of the Central Excise Act, 1944 (the Act). 2. The facts of the case are that the appellants manufactured and cleared cocoa butter and cocoa powde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that in all those cases where the scrap has been retained and the sale proceeds of the same retained by the appellants, the sale proceeds have to be taken as additional consideration to be reckoned towards job work charges and therefore have to be added for consumption of the assessable value." The impugned order upheld the order of the Original Authority relying on the same decision of the Tribunal, which was affirmed by the Apex Court as reported in 2000 (115) E.L.T. A77 (S.C.). 3. In the appeal filed before the Tribunal, it is submitted that the cocoa husk was a waste material and they had discharged the applicable duty on the cocoa butter and cocoa powder on the value computed following the ratio of the Apex Court's judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al issue as to whether the sale proceeds of scrap arising in the course of manufacture by job worker was to be included in the assessable value, it was held that if the sale price of waste was to be included as an additional consideration, it would follow that it would have to be deducted from the cost of the raw material and if that was not done, such a charge was in fact included twice over. The Tribunal accordingly held that the price of scrap retained by the job worker was not to be included as additional consideration in the value of goods manufactured on job work basis. The Tribunal held to the same effect in Hindustan Engineering Industries Ltd. v. CCE, Kolkata [2002 (144) E.L.T. 418 (Tri. - Calcutta)]. In that case, Railways had s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision. Another authority relied on is the judgment of the Apex Court in International Auto Ltd. (supra) wherein it was held to the effect that non-inclusion of the cost of inputs received from principal manufacturer in the value of the intermediary product was of no consequence since the final product cleared by the principal manufacturer suffered duty and whatever duty was paid by the job worker on the intermediate goods was available as Cenvat credit to the principal manufacturer. 6. In the Lawkim Ltd. case (supra), the Tribunal followed the ratio of the International Auto Ltd. case. In the Lawkim Ltd. case, the appellants had not included the cost of materials received free of cost from the principal manufacturer and the procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufactured by the job worker was of no consequence as the principal manufacturer cleared the final product on payment of appropriate duty and the duty paid by the job worker on the intermediate product was available to the principal manufacturer as Cenvat credit. 9. After considering the judgment of the Apex Court in the Jay Engineering case and the International Auto case, the Tribunal, in P.R. Rolling Mills Pvt. Ltd. case (supra), held that the question of adding the value of scrap in the value of the intermediate product cleared by a job worker to the principal manufacturer did not arise. We find that in the Lawkim Ltd. case, the decision of the Tribunal was to the same effect. We note that the Apex Court, in the International Au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... product being subjected to excise duty. What was in consideration was the final product, namely, wagons. 7. In this appeal as we have already noted, the final product was the excavator. According to the Modvat scheme, it is the Modvat of such final product which would have to include the cost of the inputs and in respect of which Modvat credit could be taken at the time of clearance of the final product. The Tribunal having misconstrued the provisions of Rule 57F(2)(b), its decision cannot stand. The decision of the Tribunal is accordingly set aside and the appeal is allowed." 10. We also find that as argued by the appellants, the appellants have a strong case on limitation. The department was aware of the assessee selling ..... X X X X Extracts X X X X X X X X Extracts X X X X
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