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Razzolone Chemicals Versus Commissioner of Central Excise, Mumbai

2016 (337) E.L.T. 590 (Tri. - Mumbai) - Valuation - Clearance of goods on job work basis - no evidence provided that the goods cleared on job work basis are not the same as the goods cleared otherwise - Appellant paid duty in terms of the decision of Hon'ble Apex Court in the case of Ujagar Prints Ltd. Vs. Union of India & others [1989 (1)124 - SUPREME COURT OF INDIA] - Held that:- valuation is not an exact science. Some amount of guess work exists in valuation. Therefore, different methods are .....

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w. - Decided in favour of assessee - APPEAL No. E/44/12 - ORDER NO. A/86908/2016-WZB/EB - Dated:- 1-4-2016 - Mr.S.S.Garg, Member (Judicial) AND Mr. Raju, Member (Technical). Shri.Durgesh Nadkarni, Advocate for the appellant Shri.Ashutosh Nath, Asst. Comm. (AR), for the respondent ORDER: 1. The appellants are manufacturers of chemicals. The manufacture of chemicals for themselves and on job work for other parties, namely Orchem industries and Orchem intermediates. The notice was issued to the app .....

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ppellants have not given any evidence that the goods cleared on the job work basis are not the same as the goods cleared otherwise. The impugned order assesses the goods under rule 7 read with rule 6 (b) of the Central Excise (valuation) rules 1975. After observing that the impugned order upholds the order in original, except for any adjustment on account of differential duty for the month of May 97. Learned counsel for the appellants argued that in the circumstances the decision of Apex Court i .....

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s relied on the decision of Hon Apex court in case of IPF Vikram India 2008 226) ELT 4 (SC) where the facts are substantially different as the Principal had substantial control over the job worker. Moreover the decision of Hon Apex court in case of Ujjagar Prints (Supra) was not cited before the court. 4 We have gone through rival contentions. 4.1 The Commissioner (Appeals) has observed that the appellants have not produce any evidence to substantiate that the goods manufactured on job work are .....

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method of valuation of goods manufactured on job-work basis after the introduction of the new valuation provisions w.e.f. 1-7-2000. 2. The matter has been examined by the Board. It is observed that the system of getting goods manufactured on job-work basis is not new. Under the provisions of the earlier section 4 and the Rules made thereunder the matter has been finally decided by the Apex Court in the case of Ujagar Prints Ltd. [1989 (39) E.L.T. 493 (S.C.)] and the case of Pawan Biscuits Co. Pv .....

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, overheads etc.) incurred by the buyer (or the supplier of the raw materials), where the dealing between the two are on principal to principal basis. The mere fact that the buyer is supplying some raw materials free of cost to the job-worker, will not be sufficient ground to contend that the dealings between the two are not at arms length. Goods manufactured on job-work were earlier assessed under the residuary Rule 7 of the erstwhile valuation Rules of 1975 read with rule 6(b) read with the Ap .....

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sis, valuation would be governed by Rule 11 of the new valuation Rules of 2000 read with rule 6 read with the above two decisions of the Apex Court Circular No. 643/34/2002-CX., dated 1-7-2002 clarified 11. How will valuation be done in cases of job-work? Please also refer to Board's Circular 619/10/2002-CX.,dt. 19-2-2002. Cost of transporting the raw materials/inputs to the premises of the job-worker will also be added to determine the cost of the raw material/input. [1997 (71) ECR 381 (TRI .....

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