TMI Blog2006 (11) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... s :- The assessee manufactures different types of confectioneries which are excisable. They carried out job works for M/s Parry's Confectionery Ltd., Chennai based on an agreement between them. M/s Parry's Confectionery Ltd. would supply raw material. The Revenue initiated proceedings against the assessee on the ground that they have not included various amounts while determining the assessable value of the goods cleared for the period from September 1997 to March 2002. The original authority confirmed the demand of Rs. 1,40,599/-. Interest under Section 11AB of the Central Excise Act was also demanded. Equal penalty under Section 11AC of the Act was imposed. 3.Actually there were three issues - (1) Inclusion of production incentive pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tionery Ltd. The officer was deputed by M/s Parry's Confectionery Ltd. to ensure that the final product which are going to be supplied to M/s Parry's Confectionery Ltd. confirm to the quality specification under the agreement entered between the appellant's company and M/s Parry's Confectionery Ltd. The officer, in other words, is only a person deputed by the raw material supplier for ensuring that the products supplied to the raw material supplier confirmed to the quality standard. It is pertinent to note that the production process at the assessee's factory involves quality checks at various stage and hence the assessee does not require another person to perform quality checks of the final product at a stage just prior to clearance. It wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r for the confectionary manufacture and is a part of the intrinsic value of the goods as held by the Apex Court in the case of Ujagar Prints case [1989 (39) E.L.T. 493 (S.C.)]. Thus the findings that the payment has nothing to do with manufacture is not correct. (iii)The Commissioner (Appeals) has not appreciated the show cause notice properly while reaching the conclusion that the Order-in-Original is in variance with the show cause notice so far as cost of excess raw materials value of Rs. 2,04,800/- consumed is concerned. The Commissioner (Appeals) found that the show cause notice is regarding reversal of Cenvat credit whereas the order is on the valuation. The relevant portion at Para 13 of the show cause notice is extracted below :- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) wherein it has been held that Testing charges in respect of Meters are not deductible from the assessable value. Further the decision of the Tribunal in the case of Hindustan Gas Industries Ltd. v. Commissioner of Central Excise Customs, Baroda [2001 (133) E.L.T. 481 (Tri. - Mumbai)] was relied on, wherein it was held that inspection charges for testing of inserts conducted by RITES has to be included in the absence of optionality. The case of Saket PVC Pipes Industries Pvt. Ltd. v. Commissioner of Central Excise Customs, Patna [2004 (168) E.L.T. 48 (Tri. - Kolkata)] was also relied on wherein it was held that testing charges includible in the assessable value of the product in absence of any evidence in support of contention that s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le in the assessable value. The citation in the case of Bhasker Ispat Pvt Ltd. and other case laws cited supra are clearly applicable to the issue. Therefore we set aside the Commissioner's (Appeals) order for inclusion of the remuneration of the supervisor appointed by M/s Parry's Confectionery Ltd. 7.As regards the issue No. 3, for demanding duty on account of receipt of excess consumption of raw material, we find that Para 8 of the show cause notice speaks of reversal of Cenvat credit. Further Para 12 speaks of demand of duty involved on the excess raw material consumed. Since there is no clarity in the show cause notice, we have to agree with the Commissioner (Appeals) that the adjudication order goes beyond scope of the show cause no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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