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2016 (6) TMI 1018 - CESTAT HYDERABAD

2016 (6) TMI 1018 - CESTAT HYDERABAD - 2016 (343) E.L.T. 846 (Tri. - Hyd.) - Valuation - Job work - Department took the view that since the goods were cleared to the work sites where the appellant had undertaken the Supply and Apply contracts, there is no sale involved in these clearances, therefore the valuations adopted should have been under Rule 11 of the said Valuation Rules. - Hence the value could be arrived by deducting the expenses incurred on application of paints (labour charges) from .....

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portion, for reasons discussed supra, we uphold the lower authority s conclusion that since the sale of product viz- paint is linked to the application part of the paint at the customer's site, the application is in relation to the goods and therefore, except the value of the labour component for application no other component can be deductible from the sale value for arriving at assessable value. - Demand alongwith interest confirmed - penalty u.s 11AC waived - Decided partly in favor of .....

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he Central Excise Tariff Act, 1985. The appellant was undertaking job work of painting by engaging various contractors on Supply and Apply contracts and effected clearances thereof by adopting value in terms of Section 4 of the Central Excise Act, 1944 by resorting to Rule 8 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. The Department took the view that since the goods were cleared to the work sites where the appellant had undertaken the Supply and Apply co .....

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88/2007) and from 4/2004 to 3/2005, amounting to ₹ 4,53,231/- (relating to Appeal No. E/789/2007). On adjudication, the demands were confirmed along with imposition of interest and penalty. On first appeal, the lower appellate authority/Commissioner (Appeals) upheld the adjudication orders. Aggrieved by the impugned orders, the appellant herein has filed these appeals. 3. It is the contention of the appellant that the goods are not offered for sale but are consumed by them for execution of .....

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ntract price which should never form part of the assessable value. As the paints were consumed by them even though not used for production or manufacture of articles, Rule 8 only is appropriate. 4. We find that the crux of the dispute is whether Rule 8 or Rule 11 of the said Valuation Rules is to be followed for arriving at assessable value and discharge of central excise duty. The said Rules are reproduced below: Rule 8: Where the excisable goods are not sold by the assessee but are used for co .....

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paints cleared by the appellant are used for any captive consumption by him or on his behalf, for production/manufacture of other articles. The excisable goods sought to be cleared out of the factory by the appellant are paints only and not any other article produced or manufactured thereof. In our view, from the facts on record, the Supply part of the Supply and Apply contract would involve clearance only of paints outside the factory and they have to be necessarily considered sale of the goods .....

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Home Pipe Company Ltd., Vs CCE, Trichy [2015 (321) ELT 460 (Tri-Chennai)], the appellants therein had been awarded turnkey projects by Tamilnadu Water and Drainage Board, for supply of water and were not only required to lay PSC pipes but also maintain them for one year. However, this is certainly not the situation in the appeals before us. 6. So also, the case of CCE, Nagpur Vs Diffusion Engineering Ltd., [2014 (300) ELT 145 (Tri-Mumbai)], the goods were only removed from one unit for use in an .....

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