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2016 (12) TMI 32 - CESTAT MUMBAI

2016 (12) TMI 32 - CESTAT MUMBAI - TMI - Demand - valuation - undervaluation of compound of automatic chemicals dIspatched to contract manufacturers during the period January 1995 to April 2000 - understating overheads, labour charges and profit margin as the final products manufactured by contract manufacturer’s were sold in entirety to respondent - Whether the respondent has short paid the duty on the various goods cleared by them to their contract manufacturers? - Held that: - learned Counsel .....

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ow - Since the self same issue has already been decided by the bench for the subsequent period and for the earlier period, the adjudicating authority by an order dated 31.3.2000 has held the same we do not find any merits in the appeal filed by the revenue. - As an identical issue for the subsequent period in respect of the very same respondent held in their favour, respectfully following the same, we reject the appeal filed by the revenue - decided in favor of respondent-assessee. - Appeal .....

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ir contract manufacturers. The respondent cleared certain chemicals and substances to their contract manufacturer by discharging duty on such goods on the basis of cost certificates given by the chartered accountant; it is the revenue's case that the respondent has undervalued such goods by understating overheads, labour charges and profit margin as the final products manufactured by contract manufacturer s were sold in entirety to respondent Show cause notices were issued demanding differen .....

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Certificates. The CCE has not addressed this point at all She has completely side tracked this principal issue. b. The Assessee refused to address the issue of Cost of Manufacture plus Profit raised in the SCNs The SCNs have raised demands upon the basis of Cost of manufacture plus profit ire. the basis on which duty was being paid by the Assessee uptil the Department doubted the correctness of by The CCE dealt with this issue at all. She has accepted the value, declared by the assessee on the .....

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ection (1) of Section 4 of CEA, 1944, where the normal price of goods is not ascertainable, one must adopt the nearest ascertainable equivalent thereof, determined in such manners as may prescribed. The manner of ascertainment of the value in terms of clause (b) is provided for by the Central Excise (Valuation) Rules, 1975. d. The Apex Court, in the case of M/s. Ashok Leyland Ltd. 2002(146) ELT 503(SC) held that "therefore the normal price would be the price at which the goods are sold in t .....

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s by the Assessee themselves. Such reduced price for supply of raw materials depresses the sate price of finished goods by Contract Manufacturers to the Assessee. f. The Apex Court has in CCE Vs Fiat India Pvt. Ltd. 2012 (283) ELT 161 (SC) has held that if cost of production is more than the sales price then duty liability needs to be discharged on cost of production. Hence, the exercise undertaken by the Department through the issue of these 4 SCNs, to know the actual manufacturing cost plus pr .....

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g. In this case, goods manufactured by the Assessee are sent: to their contract manufacture who in turn use the said product in the manufacturer of Colgate brand tooth pastes and tooth powder. The finished branded products are ultimately fully sold back to the Assessee in terms of the price mutually agreed. As such the transaction between the assessee and contract manufacturer with regards to these goods is more akin to transaction between principal and job worker. In Pawan Biscuits Co. Pvt. Lt .....

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nd at arm's length and the value declared by them is normal value u/s The Assessee has not produced any other documents / details to consider the said declared value as normal prices On identical facts, in M/s. Poornalaya Electricals Vs CCE 1999(107)ELT 660 (T), the Tribunal accepted the absence of mutuality of interest and transaction at arm's length but observed Rs.that M/s. Prompt India was extending help to the appellants by way of identifying the source of supply of raw materials, n .....

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m the above is that the price charged cannot be considered as sole consideration for sale of goods in that view of the be accepted and the assessable value is to be fixed under the Valuation Rules provided under d (A) (B) (sic) of Central Excise and Salt Act. This decision is applicable to the facts of the present case and it was available to the CCE. However she has not considered this decision. 4. Learned Counsel appearing for the respondent would submit that identical issue of the very same a .....

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