TMI Blog2007 (6) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... The brief facts of the case are that the appellant has entered into contract with M/s. TISCO for conversion of steel blooms/billets supplied by M/s. TISCO into rounds/bars and after such conversion return the same to M/s. TISCO. The yield from the raw material to final product was considered as 87% in the case of double rolling and 91% in the case of single rolling. M/s. TISCO has allowed the appellant to retain the scrap at their end. The conversion charges ranged from Rs. 4,000/- per MT to Rs 5,500/- per MT depending upon the nature and quality of the material received from M/s. TISCO. In addition to the same the appellants was also receiving documentation charges Rs. 10/- per MT from M/s. TISCO. 2. During the course of scrutiny it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inconformity with the law laid down by the Apex Court in the case of Ujagar Prints v. Union of India reported at 1989 (39) E.L.T. 493 (S.C.). In this case the Apex Court has clearly held that if the trader would give a declaration to the processor as to what would be the price at which he would be selling the processed goods in the market, that would be taken by the Excise authorities as the assessable value of the processed fabric and excise duty would be charged to the processor on that basis provided that the declaration as to the price at which he would be selling the processed goods in the market, would include only the price or deemed price at which the processed fabric would leave the processor's factory plus his profit. It was su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hey have been filing RT 12 return declaring the assessable value and the fact that they were paying duty at the price declared by M/s. TISCO and not on the cost of raw material plus job charges was in the knowledge of the department in-as- much as this matter was raised by the Jurisdictional Superintendent vide his letter dated 15-12-1995 wherein he has referred to the two sets of price being declared by M/s. TISCO and further CERA audit has in its audit report in February 1997 referred to the incorrect method of arriving at the assessable value as the same was lower than the cost of raw material. In view of this demand was time barred. They were under the bona fide belief that the goods were required to be assessed at the value as declar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... determined on the basis of landed cost of raw material + job work charges including the profit of the job worker and other expenses and since the appellant in the present case has manufactured the goods on job work basis, price should have been determined on the basis cost of raw material + job charges + other expenses recovered from supplier and not on the prices declared by M/s. TISCO and therefore the demand cannot be faulted with. The appellants have never disclosed that the assessable value was less than the cost of raw material and reference to the Superintendent's letter goes in favour of the department as the appellants have in their reply misstated that the duty was being paid on a higher price when actually they were paying duty a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sary to include the processor's expenses, costs and charges plus profit, but it is not necessary to include the trader's profits who gets the fabric processed, because those would be post-manufacturing profits." 10. The Apex Court has very clearly held that the price at which the trader sells the goods must be the value of the grey cloth or fabric plus the value of the job work done plus the manufacturing profit and the manufacturing expenses. The Tribunal in the case of Sangam Processors and other have only held that if the cost of grey fabric (raw material) is incorrectly given by the trader which is not in the knowledge of the job worker, the job worker cannot be held liable for the incorrect declaration of price by the trader. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r regarding existence of two prices have misstated that the duty was being paid at a higher price. As regards the matter being pointed out CERA in 1997, the appellants were asked by Bench to produce all correspondence with department regarding the objection for which they sought time but later expressed their inability to do so. We are also not convinced by the plea of bona fide belief as the law was laid down by the Supreme Court in 1989 in Ujagar Print's case and was followed through out and the decisions in the case of M/s. Sangam Processors has been twisted by the appellants. Even otherwise this decision was delivered in 2000, whereas demand is for year 1996 to 2000 and therefore they could not have been guided by it. The Board's ..... X X X X Extracts X X X X X X X X Extracts X X X X
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