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M/s. Sri Kannapiran Mills Ltd. Versus CCE & ST, Salem

2016 (6) TMI 541 - CESTAT CHENNAI

Valuation - Job worker - manufacture and clearance of intermediary goods to the principal manufacturer for manufacture of final goods - addition of 115% of the cost of production - Held that:- the appellant was related to the principal manufacturer as interconnected undertaking and covered by Section 4(3)(b)(i) of the CEA, 1944. Such a case fundamentally goes out of the scope of Rule 9 of Valuation Rules because that rule does not cover the interconnected undertaking within its fold. Therefore, .....

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uestioned by Revenue. Therefore, there is no need to go further since the assesse says that Ujagar prints procedure has been followed and Revenue totally ignored such aspect to be examined. Therefore, the Tribunal cannot make a new case to create jurisdiction for it to decide the issue not before it. Since the case is covered by Section 4 (3) (b) (i), the present appeal is answerable in terms of Rule 10 read with Section 4 itself. - Decided in favour of appellant with consequential relief - E/24 .....

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of CEA, 1944, following the normal transaction value principle. Appellant further explains that so far as the valuation of the goods cleared by it is concerned, it follows the rule laid down in Ujagar prints Etc.Etc. Vs. UOI & Others reported in 1989 (39) ELT 493 (S.C.). Appellant has also been guided by CBEC Circular No. 619/10/2002-CX dated 19 Feb- 2002, in that regard. He relies on para 2 and 3 of the Circular to say that the assesse took into consideration the cost elements and normal ra .....

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, 1944, that attracts peculiar valuation methodology instead of the normal valuation formula applicable under Section 4. The case of the appellant falls under Section 4 (3) (b) (i) of CEA, 1944 when para-2 of the finding in the adjudication order is read. It being related to the principal manufacturer, as interconnected undertaking, the appellant is out of the scope of Rule 9 of above Valuation Rules. Reading of Rule 9 specifically throws light that once an assesse does not fall under the basic .....

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assesse to the scope of Section 4 (1) of CEA, 1944. Therefore, the valuation of the intermediary adopted by the appellant is in accordance with the normal transaction value following the principles laid down by Ujagar prints Etc.Etc. Vs. UOI & Others - 1989 (39) ELT 493 (S.C.). 4. Appellant s prayer is that the allegation of Revenue that it should value the intermediary cleared to the principal manufacturer shall be adding 115% of the cost of production is misconceived, unwarranted and uncal .....

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