TMI Blog2014 (6) TMI 201X X X X Extracts X X X X X X X X Extracts X X X X ..... from the chassis. Since the said motor vehicles were not sold by the appellants and sold for the first time by TML, the value was to be determined in this case under Rule 10A of the Central Excise Valuation Rules, which provided for determination of value of the final products manufactured on behalf of the principal manufacturer - Following decision of Audi Automobiles & Others [2009 (5) TMI 426 - CESTAT, NEW DELHI] and M/s. Hyva (India) Pvt. Ltd. (2013 (8) TMI 770 - CESTAT MUMBAI) - Matter remanded back - Decided in favour of Revenue. - APPEAL NOs.: E/A/179, 081/2010, E/A/545, 726, 743/2011, E/A/036, 037, 038, 112/2012, E/A/170, 171, 262, 264/2012, E/A/249, 258, 259, 260, 365/2012, E/A/263, 298, 299, 349/2012, E/A/352, 366, 367, 368, 408/2012, E/A/369, 370, 371, 439/2012, E/A/505/2 - ORDER NO.FO/A/75263-75318/2014 - Dated:- 22-5-2014 - DR. D.M.MISRA AND DR. I.P.LAL, JJ. FOR THE APPELLANT : SHRI V.SRIDHARAN, SR. ADVOCATE ASSISTED BY S/SHRI R.RAGHAVAN, ADVOCATE S.MIRDHA, ADVOCATE FOR THE RESPONDENT : SHRI D.K.ACHARYYA, SPL. COUNSEL JUDGEMENT Per Dr. I.P.Lal These appeals are filed by M/s. Hyva (India) Pvt. Ltd. Others (here-in-after referred to as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , motor vehicles, were sold from the Depots by TML at much higher price. Department objected to determination of value as above, which, according to the Department, should have been determined under Rule 10A of Central Excise Valuation Rules, 2000. Accordingly, show cause notices were issued to the Appellants for demanding the duty after determining the value under Rule 10A (inserted with effect from 01.04.2007) of the Central Excise Valuation Rules,2000. The show cause notices were adjudicated by the Commissioner of Central Excise, Jamshedpur, wherein he confirmed the duty along with interest, imposed penalty of equal amount on the Appellants under Section 11AC of the Central Excise Act, 1944 and also the penalty on TML under Rule 26 of Central Excise Rules, 2002. Similar show cause notices were issued to other assessees and similar orders were also passed by the Commissioner of Central Excise, Jamshedpur. Being aggrieved, these Appeals are filed before this Forum. 5. The ld. Sr. Advocate, Shri V.Sridharan appearing on behalf of the Appellants submitted that when the Appellants cleared the body built on chassis, to TML, there was a sale of body for a price, as contemplated unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turing goods on behalf of a principal manufacturer, from any input or goods supplied by the principal manufacturer. It is the contention that in the present Appeals, the above conditions are not fulfilled and therefore, the provisions of Rule 10A are not applicable. 7. He submitted that as the transaction between the present Appellants and TML was on principal-to-principal basis, their case was not covered under the category of on behalf of . In support of his contention he relied upon the following judgments:- (i) Basant Industries Vs. Collector of Central Excise 1995 (75) ELT 21 ; (ii) Mahavir Metal Industries Vs. CCE 1987 (28) ELT 85 (T) ; (iii) Poona Bottling Co. Ltd. Anrs. Vs. UOI 1981 (8) ELT 389 (Del.); (iv) Spencer and Co. Ltd. Vs. ACCE 1083 (14) ELT 2098 (Mad.) ; (v) Steel City Beverages Pvt. Ltd. Vs. UOI 1986 (23) ELT 147 (Pat.). 8. Ld. Senior Advocate further contended that Rule 10A consciously and deliberately employs the expression, on behalf of . This expression has been interpreted authoritatively by the Hon ble Supreme Court long ago. The Apex Court in the case of W.O. Holdsworth Ors. Vs. Stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be synonymous to ;all or every , as interpreted by the Apex Court in the case of Shri Balaganesan Metals Vs M.N. Shanmugham Chetty and Others : (1987) 2 SCC 707. In other words, the use of the expression, any , implies that for attracting the provisions of Rule 10A, every material should be supplied to the job worker/assessee by the principal manufacturer. As against this, in the present case, the Appellants put their own materials on the chassis supplied by TML during manufacture of the body-built vehicles and the value-addition was 19%. 10. He further submitted that in case of CCE Vs. Innocorp Ltd.: 2013 (292) ELT 59 (T), wherein the appellant was manufacturing plastic kitchenware and tableware under the brand name, Tupperware for M/s Tupperware India Pvt. Ltd. in terms of a manufacturing agreement, and moulds required for manufacture of those products were supplied by M/s. Tupperware, and duty was discharged by M/s. Innocorp Ltd. on the sale price of the kitchenware plus amortized cost of moulds under Section 4 of the Central Excise Act, 1944 read with Rule 6 of the Central Excise Rules, 1944. The Tribunal held that as the transactions were on principal-to-principal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pex Court in case of Bombay Tyre International, 1984(1)SCC 467, holding that assessable value under Section 4 which is exigible to excise duty, is the price which the manufacturer has charged from his buyer, and the Apex Courts judgment in case of Ujagar Prints Others vs UOI Oths.(1988(38ELT 53(ST), holding that the measure of levy in case of job work, must be job charges alone. Since Rule 10A seeks to levy duty on the price of the principal manufacturer presuming them (i.e.buyer of the goods), therefore, Rule 10A contravenes the provisions of Section 3 and Section 4 of the Central Excise Act, 1944. 14. He submitted that the Apex Court in the case of Prestige Engineering (I) Ltd. Vs. CCEx reported in 1994 (73) ELT 497 (SC), held that while a job worker contributes his own raw materials to the raw materials supplied by customer and the manufactured goods, it does not amount to a job work. However, while deciding the case of M/s. Hyva India Pvt. Ltd. reported in 2013-TIOL-166-CESTAT-Mum., the Tribunal overlooked this decision. He submitted that as in the present case, the Appellants used their own materials and machineries for manufacture of body on chassis, the work down by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Depots of TML, those were sold for the first time to the customers etc. In this context, Revenue was of the view that HIPL was a job worker on behalf of TML, who were the principal manufacturer in terms of Rule 10A ibid; hence Central Excise duty was payable on the RSO sale price of the principal manufacturer and not on the invoice price of HIPL, who are the job-workers. The ld. Special Counsel submitted that the facts of the present case are identical to the facts of the cases in Appeals of HIPL i.e. M/s Hyva themselves decided by CESTAT, WZB, Mumbai reported in 2013-TIOL-166-CESTAT-Mum, wherein it has been held that the value of the goods supplied by the Appellants (HIPL) to TML has to be determined under Rule 10A of Central Excise Valuation Rules, 2000. He submitted that the facts are also the same as in the case of Audi Automobiles Vs. CCE, Indore reported in 2010 (249) ELT 124 (Tri.-Del) in which the Principal Bench at New Delhi also held that Rule 10A is the applicable valuation Rule and not any other Rule. 18. The ld.Spl.Counsel further submitted that CESTAT, Mumbai in the case of HIPL Vs, CCE, Belapur(cited supra), had considered the Board s Circular and quoted extensi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... behalf of a person (hereinafter referred to as principal manufacturer), then, - (i) in a case where the goods are sold by the principal manufacturer for delivery at the time of removal of goods from the factory of job-worker, where the principal manufacturer and the buyer of the goods are not related and the price is the sole consideration for the sale, the value of the excisable goods shall be the transaction value of the said goods sold by the principal manufacturer; (ii) in a case where the goods are not sold by the principal manufacturer at the time of removal of goods from the factory of the job-worker, but are transferred to some other place from where the said goods are to be sold after their clearance from the factory of job-worker and where the principal manufacturer and buyer of the goods are not related and the price is the sole consideration for the sale, the value of the excisable goods shall be the normal transaction value of such goods sold from such other place at or about the same time and, where such goods are not sold at or about the same time, at the time nearest to the time of removal of said goods from the factory of job-worker; (iii) in a case not c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the said expression was used in the said notification. 17. Rule 10A undoubtedly speaks of work on behalf of the principal manufacturer. It does not use the expression for the manufacturer. In that connection as said earlier, attention was drawn to the provisions relating to the service tax and the circular issued by the Board. The circular dated 18th July, 2007 issued by the Board refers to service tax liability in respect of common biomedical water treatment facility when such activity falls under the category of business auxiliary service. It was clarified by the Board that the incineration/shredding of bio-medical waste can by no stretch of imagination, be called as processing of goods , even if in certain cases the shredded materials may be used as fillers etc. Further, the activity also does not qualify to be called as provision of service on behalf of the client. It was in a case of taxable activity falling within the category of business auxiliary service while the client is obliged to provide some service to a 3rd person but instead of the client providing such service, the service provider provides such service to the 3r person, on behalf of the cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of would reveal that in order to be a job worker he has to be a representative of or on behalf of the principal manufacturer to the third party in relation to the manufacture of excisable goods. The rule nowhere refers to any third person as such nor the expression in the manner it has been used discloses any intention of the Legislature to the representation to any third party on behalf of the principal manufacturer. 19. In the circumstances, therefore, neither the decision of the Apex Court nor the circular of the Board is of any assistance to the appellants to drive home their contention with reference to either the expression job worker or the expression on behalf of in Rule 10A. 20. It is also pertinent to note that the contention on behalf of the said firms is that they are the sub-contractors in relation to the body building activity of the motor vehicle. The purchase order to which our attention was drawn, also refers to the expression sub-contracting. With reference to the same it was sought to be contended that there was a contract between the manufacturer of chassis and the said firms in relation to the manufacture of body building for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the manufacturer of chassis and the said firms, and in case, such understanding was in the form of writing, to place on record the document in that respect. 21. In the facts and circumstances of the case, it is difficult to accept the contention that the work entrusted to the said firms was not to a job work within the meaning of expression under Rule 10A or that it was not the work on behalf of the principal manufacturer. In the facts and circumstances of the case, it is apparent that the said firms had cleared the goods in relation to the body fabricating and mounting on the chassis which were supplied to the said firms free of cost by the manufacturer of chassis. Being so, the activity for the purpose of valuation would squarely fall under Rule 10A and not under Rule 6. We, therefore, do not find any illegality in the impugned order as far as the demand of duty and interest payable thereon from the appellants. 25. It is evident from the above quotation, that the reliance on the Circular issued by the CBEC in respect of the service tax matters and the reliance on the decision in Prestige Engineering India Ltd. (supra) were considered by the Tribunal in the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, Mahavir Metal Industries, Poona Bottling Co. Ltd. Anrs., Spencer and Co. Ltd., Steel City Beverages Pvt. Ltd. We find that the issue involved in these decisions, was regarding applicability of exemption Notifications viz.85/72, 176/77, 211/77 etc. Thus, we find that the interpretation of words, on behalf of , was not in respect of interpretation of Rule 10A, which was not in fact, in existence at that time. Therefore, these decisions are distinguishable from the facts of the present Appeals. 28. The ld. Senior Advocate for the Appellants also relied on the Patna High Court s decision in case of Tata Engineering and Locomotive Co. Ltd., which was in respect of body builders. It is noticed that in the said case, show cause notices were issued demanding duty on the Principal, M/s. Tata Engineering and Locomotive Co. Ltd. and not from the body builders, while in the present case, the duty has been demanded from the Appellants and not from TML. Moreover, when the decision was passed, Rule 10A was not in existence. Therefore, we are of the view that the ratio of the said decision is not applicable to the present case. 29. The Appellants have further relied on the decision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellants by TML and that the appellants used their own materials to manufacture body. In view of the Explanation given below Rule 10A, their case is not covered by Rule 10A. In this regard, we find that the Apex Court in case of Shri Balaganesan Metals vs. M.N.Shanmugham Chetty and Others, (1987) 2 Supreme Court Cases 707, held that the word, any has a diversity of meaning and may be employed to indicate all or other as well as some or one . We, therefore, find that it is not necessary that all the materials should be supplied and even if some of the materials are supplied, then in that case, it will satisfy the meaning of the expression, any used in the Explanation to Rule 10A. 31. As regards the Appellants contention that they were not given a copy of the Trust Receipt and in cases where the copy of the Trust Receipt was provided, the said Receipt did not relate to the said case, we find that from this Trust Receipts , the ld. Commissioner in his Order observed that the Appellants held chassis in trust, supplied by entruster for the sole purpose of constructing body, to mount the same thereon and strictly returned the same (to RSO of TML) after mounting th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vehicles, as provided in Section 4(1)(b) of the Act, the value is to be determined in such manner, as may be prescribed. For this purpose, Valuation Rules have been framed and Rule 10A has been inserted in the said Rules with effect from 01.04.2007, to determine the value in such cases, in our opinion, there is no contravention of the provisions of Section 4. We further find that the identical issue has been decided by the two Co-ordinate Benches of the Tribunal in case of Audi Automobiles and Hyva India Pvt. Ltd.(supra). 34. We find that in support of his arguments that duty is payable only on the job charges in these cases, the ld. Advocate has cited various case law in case of Atic Industries Ltd., Bombay Tyre International Ltd. and Ujagar Prints (supra), we find that these judgments relate to a period when Rule 10A was not existence and therefore, they are distinguishable from the facts of the present case. 35. We are, therefore, of the view that in the light of the decision of the Tribunal in Audi Automobiles Others and M/s. Hyva (India) Pvt. Ltd. (cited supra) and the facts of the case discussed as above, the value of the goods supplied by the appellants, is to be de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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