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The Commissioner Customs &Central Excise Versus M/s Sangfroid Pharma Pvt. Ltd.

2016 (8) TMI 578 - CESTAT HYDERABAD

Valuation - Job-work for loan licenses - Demand - Differential duty on the deferential value between net price of the loan licensee and the declared net price - evasion of duty - declaration of net price in the prescribed attachments without production of invoice detailing the quantum of discount given to wholesalers/retailers - Held that:- there is no indication in the show cause notice to suggest that wholesaler/retailer was required to make payment to the job-worker. We also note that there i .....

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b-worker is in receipt of any amount, other than job-work charges paid by the loan licensee, from the wholesaler/retailer. Consequently, there is no basis for alleging that such trade discount has been retained by the respondent. There is no scope to attribute any motives or an opportunity to the respondent for retaining a portion of the consideration when there is no allegation that the consideration paid by the wholesaler/retailer passes through the respondent. The original authority has, corr .....

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t ORDER [Order per: C J Mathew] 1. This appeal is filed by Revenue against order-in-original no. 11/2015-CE dated 30th June 2005 of Commissioner of Central Excise, Customs & Service Tax, Hyderabad-III, which dropped proceedings in show cause notice OR 7 /2004/Hyd-III/Adjn dated 1st October 2004. 2. The said show cause notice was issued to M/s Sangfroid Pharma Pvt Ltd, manufacturer of patent and preparatory medicaments as job-worker for loan-licenses of M/s N R Jet Enterprises, M/s Glaxo Indi .....

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3. 3. The agreement between the job-worker and the loan licensees required supply of raw materials and technical know-how and the job worker was entitled to processing charges. It was the responsibility of the job-worker to discharge the duty liability upon clearance of the goods. 4. Revenue contended in appeal that the respondent had failed to furnish documentary evidence of discount having been passed on to the wholesaler/retailer, that the responsibility for discharging the burden rested upon .....

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erential value between net price of the loan licensee and the declared net price. 7. The impugned order has held the allegation to be untenable in the absence of any evidence that the discount claimed has not been passed on to the wholesaler/retailer. 8. In the scheme of clearance by job-worker, who is supplied with inputs by the loan-licensee, the person who discharges the duty liability is in receipt of merely the agreed upon job charges from the loan-licensee. Clearance and discharge of duty .....

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r portion being expended by the loan-licensee. Apparently, the price at which the wholesaler/retailer is to be supplied is determined by the loan-licensee who also assumes the responsibility for complying with the procedure laid down in the Central Excise Rules. It is difficult to conclude that the job-worker is in receipt of any amount, other than job-work charges paid by the loan licensee, from the wholesaler/retailer. Consequently, there is no basis for alleging that such trade discount has b .....

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