TMI Blog2016 (11) TMI 506X X X X Extracts X X X X X X X X Extracts X X X X ..... n excess of assessable value liable to be adopted by the appellants. There could be no arguing that, by adopting the sale price of SAIL, the appellants under valued the goods and paid less duty than was due. Demand not sustainable - appeal allowed - decided in favor of appellant. - Appeal Nos. E/4005/05, E/592/07-Mum - A/93203-93204/16/EB - Dated:- 19-10-2016 - Mr. M.V. Ravindran, Member (Judicial) And Mr. Raju, Member (Technical) Dr. Samir Chakraborty, Senior Advocate, with Shri Prasad Paranjape, Advocate, for appellant Shri S. Hasija, Superintendent (AR), for respondent ORDER Per M. V. Ravindran These two appeals are directed against order-in-original No. 16/CEX/2005 dated 31.8.2005 and order-in-appeal No. P-I/343/2006 dated 20.11.2006, respectively. Since both the appeals are raising the same issue and pertains to the same assessee, they are disposed of by a common order. 2. The matter was heard on two days. 3. The relevant facts that arise for consideration are that in terms of an agreement dated 11.5.1999, effective from 1.4.1999, the appellant as external processing agent of TISCO, was required to process rough forged rings, to be dispatched ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enclosures, were submitted on 5.5.2005 at the time of personal hearing. The lower authorities did not agree with the contentions raised by the appellant, accordingly, confirmed the demands raised with interest and also imposed penalties. 4. Dr. Samir Chakraborty, Senior Advocate, along with Shri Prasad Paranjape, Advocate, appeared for appellant and Shri S. Hasija, Superintendent (AR), appeared for Revenue. 5. Senior Advocate took us through the records, show cause notices, replies and impugned orders. His submissions are summarized as below:- 5.1 Undisputedly clearance of the said goods effected at TISCO s sale prices (contract prices) to SKF Ltd. and duty paid on the said basis. The said prices/values inter alia included not only cost of materials, cost of conversion and job workers profit but also profit of TISCO on sale of the subject goods. In such circumstances, there can be no question of any short levy or short payment or undervaluation of the said goods. In support of this contention, he relied on the following decisions:- (i) Surindra Steel Rolling Mills vs. CCE 2003 (155) ELT 357 (T), affirmed by Hon ble Punjab Haryana High Court as reported in 2008 (226 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontravened by the appellant in the instant case. In such circumstances, penalty imposed under this provision is also untenable and unsustainable. He relied on the following decisions:- (i) Amrit Foods vs. CCE 2005 (190) ELT 433 (SC); (ii) CCE vs. Fenner (I) Ltd. 2014 (313) ELT 3 (Mad); (iii) Metro Enterprises vs. CCE 2014 (311) ELT 785 (T); (iv) Raymond Apparel Ltd. vs. CCE 2013 (294) ELT 151 (T). 6. In addition to above, he produces a copy of certificate from the Chartered Accountant to justify that all the expenses incurred in the manufacturing of the goods supplied to SKF is considered while discharging the central excise duty at the time of clearance. 7. Learned departmental representative would draw our attention to the findings of the Commissioner in order-in-original. It is his submission that the amount on which duty demand is raised are additional amount received by the appellant. He would then submit that the value of scrap which is retained by the appellant is the additional value that needs to be added to the assessable value of the goods manufactured and cleared. It is his further submission that the appellant has not disputed the fact tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot be saddled with additional duty liability. Our views are fortified by the following decisions:- (a) Surindra Steel Rolling Mills vs. CCE 2003 (155) ELT 357 (T), wherein the Tribunal has held as follows:- 4. We have perused the records and have heard the learned SDR also. The present Appellants are merely carrying out job work on behalf of SAIL. They convert semis (billets, blooms and slabs) into finished goods, e.g. angle, channel, joists, etc. They receive conversion charges for the job carried out by them. After conversion, the items are sold by them at prices fixed by SAIL. The Appellant job workers fell in the category of manufacturers liable to pay Central Excise duty. According to the law laid down by the Apex Court in the Ujagar Prints case, assessable value of processed goods should take in the value of the raw materials and the conversion cost and the profit of the job workers. It is not to include the profit of the merchant who finally sells the processed goods. In the present cases, the goods were sold on behalf of SAIL and the appellants paid duty at the time of removal of the goods on the sale price of SAIL. Thus, it is a case where the assessable value i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh the order of the Commissioner (Appeals) was produced wherein we find a similar view has been taken and it was submitted before original adjudicating authority that such order had been accepted by the department, the original adjudicating authority did not even discuss the issue. On this ground, he has set aside the impugned order and allowed the appeals filed by the assessee. We find ourselves in agreement with the views of Commissioner (Appeals) as regards Board s circular as well as his observations about the earlier decision of Commissioner (Appeals). Further, we also take note of the fact that in this case, the show cause notice was issued on 26-6-2000 and demand has been made invoking extended period. We also note that the job work was being done by the assessee for RIL only and by adopting sale price of RIL, we do not think there could have been any under-valuation. Further, the observations of original adjudicating authority as regards price shown in the price list of RIL and the price shown in the classification also show that except for the manufacture of November 1995, in which there was an abnormal price indicated, throughout the remaining period, the price adopted by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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