TaxTMI 
TaxTMI 
2015 (4) TMI 33
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....ial relief. The fact of the case is that on the visit by the Central Excise Officers to the respondent factory, it was observed that the value to the extent of scrap generated during the manufacturing process has to be added back to the assessable value the goods manufactured on the job work basis, since sale proceeds of such goods was allowed to be retained by the respondents. It was contention of the department that the value of job work gets reduced to the extent of scrap value allowed to be retained on its sale. Accordingly, the respondent paid the differential duty amounting to Rs. 1,13,759/- alongwith the interest of Rs. 30,620/- without any protest. The respondent later on realized that they were not supposed to pay excise duty on th....
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....eel Co. Ltd. case of this Tribunal does not exist, hence reliance on the same is incorrect. Shri V.K. Agarwal, Ld. A.R. also placed reliance on the case of [2014 (303) E.L.T. 282 (Tri-Del.)] Mech & Fab Industries Vs. CC Ex., Bhopal. He submits that the order passed by the Ld. Commissioner (Appeals) suffered by the serious infirmity and the same is not sustainable. 3. On the other hand, Shri. S. Narayanan, Ld. Counsel appearing for the respondent submits that valuation of job work was strictly done in accordance with the principle laid down by the Hon'ble Supreme Court in the case of Ujjagar Prints. The value was computed by taking total cost of raw material supplied by principal and job charges actually received from the principal. It ....
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....s, it was returned to the principal. However, the scrap generated during the course of manufacture in the job work basis has been retained by the respondent. The said scrap was sold in the market by the respondent and realized value. For the purpose of job work, the respondent is paid particular job work charges by the principal. We agree that as per the principle laid down by the Hon'ble High Court in Ujjagar print and various other judgments, the valuation of job work goods should be done by taking the cost of raw material plus job charges. However, in any valuation, if there is any extra consideration flowing to the manufacturer, the same should be added in the assessable value of the goods. In the present case the respondent is gett....
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....reater detail in the Judgment delivered today in M/s. General Engineering Works case the cost of the raw material is one element. Whatever is the quantity of raw material used, its value will have to be taken into account. Conversion charges is a second element. If by retaining scrap/waste the conversion charges get reduced, then the value of the scrap/waste will have to be added to the conversion charges. By so doing there is no inclusion of same charge twice over as erroneously held by the Tribunal. 7. Accordingly, on the principles laid down in General Engineering Works case, we set aside the impugned Judgment and allow the Appeal. The Order of the adjudicating authority dated 7th October, 2002 gets restored. There shall be no order as ....