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M/s. Bhavani Enterprises, Sree Mookambikai Polymers, M/s. Smith Enterprises Versus Commissioner of Central Excise, Pondicherry And Vice-Versa

2018 (2) TMI 139 - CESTAT CHENNAI

Valuation - job-work - appellant submitted that Rule 10A(i) and (ii) are not applicable as the goods are not sold by the appellant but are used as packing materials by M/s. Marico Ltd. (principal) for packing of coconut oil - department was of the view that the price has to be determined upto 1.4.2007 applying Rule 8 and thereafter under Rule 10A(iii) r/w Rule 4 / Rule 8 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - whether the appellants have correctly ar .....

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tively consume the goods nor does M/s.Marico consume it on behalf of appellant. - Similar issue decided in the case of ADVANCE SURFACTANTS INDIA LTD. Versus COMMR. OF C. EX., MANGALORE [2011 (3) TMI 1380 - CESTAT, BANGALORE], where it was held that provisions of Rule 10A can be brought into play only when there is a situation where excisable goods are produced or manufactured by a job worker on behalf of a person and cleared to the buyer of the principal and/or cleared to a depot or a consig .....

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Per Ms. Sulekha Beevi Since the issues involved are identical, they are taken up together for hearing and are disposed by this common order. 2. The appellants are engaged in the manufacture of Blow Moulded HDPE plastic bottles on job work basis on behalf of M/s. Marico Ltd. and availed the SSI exemption under Notification No.8./2003. M/s.Marico supplied HDPE granules for manufacture of bottles by appellants. M/s. Marico Ltd. used the said bottles for filling coconut oil for clearing their produ .....

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f the cost of production. Show cause notices were issued raising the above allegation and proposing to demand differential duty for the period 2003 04 to 2008 09. After adjudication, the original authority confirmed the demand, interest and also imposed penalties. Aggrieved, the appellants filed appeals before the Commissioner (Appeals) who upheld the same. Hence these appeals before the Tribunal. 3. On behalf of the appellant, ld. counsel Shri Ramnath Prabhu submitted that Rule 8 is not applica .....

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ing of coconut oil. In such a situation, it is Rule 10A(iii) being residuary rule which alone could be made applicable. According to this Rule, valuation is required to be done based on other Rules. That as there is no other Rule which applies to the appellant s case, recourse has to be taken to Rule 11 which says that valuation is to be determined using reasonable means consistent with the principles and general provisions of the Valuation Rules and section 4(1)of Central Excise Act, 1944. In v .....

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appellants are cleared on cost plus conversion basis as per cost certificate given by M/s.Marico. the bottles are manufactured without caps. The conversion charges include the profit margin and therefore the addition of notional profit of 10% to the cost does not arise. He relied upon the decision of the Tribunal in the case of Advance Surfactants India Ltd. Vs. Commissioner of Central Excise, Mangalore 2011 (274) ELT 261 (Tri. Bang.). He also submitted that the legal position has been maintaine .....

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sion cost as laid down in the case of Ujagar Prints. The principal manufacturer (M/s.Marico) used the bottles in its factory for filling coconut oil. The department therefore contends that assessable value has to be arrived as per Rule 8 of Valuation Rules, 2000. It is also contended that after 1.4.2007 the valuation should be done applying Rule 10A(iii) r/w Rule 8 of Central Excise Valuation Rules. It needs to be mentioned that Rule 8 applies when goods are not sold. The goods (HDPE bottles) ar .....

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n is a job worker manufacturing LABSA for M/s. HUL. It is also undisputed that HUL gives LAB and the appellant uses other consumables in the manufacture of LABSA. It is also undisputed that the appellant has been valuing the said LABSA cleared from factory premises, based upon the cost of material plus processing charges prior to 1-4-2007 when the provisions of Rule 10A were inserted into the Central Excise Valuation Rules, 2000. It is also undisputed that the said LABSA is returned back to M/s. .....

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ld by the principal manufacturer for delivery at the time of removal of goods from the factory of job-worker, where the principal manufacturer and the buyer of the goods are not related and the price is the sole consideration for the sale, the value of the excisable goods shall be the transaction value of the said goods sold by the principal manufacturer; (ii) in a case where the goods are not sold by the principal manufacturer at the time of removal of goods from the factory of the job-worker, .....

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emoval of said goods from the factory of job-worker; (iii) in a case not covered under clause (i) or (ii), the provisions of foregoing rules, wherever applicable, shall mutatis mutandis apply for determination of the value of the excisable goods : Provided that the cost of transportation, if any, from the premises wherefrom the goods are sold, to the place of delivery shall not be included in the value of excisable goods. Explanation. - For the purposes of this rule, job-worker means a person en .....

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