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M/s. Raja Magnetics Ltd. Versus CCE & ST, Coimbatore

2018 (2) TMI 917 - CESTAT CHENNAI

Valuation - includibility - scrap retained - The department took the view that during the period 2004-05 the appellants had retained scrap value of ₹ 24,30,687/- which value was required to be added to the assessable value - Held that: - Rule 6 of the Valuation Rules introduced on 01.07.2000 has amplified the earlier Rule 6 and as also added an Explanation thereto, however, even in the new Rules, there is no provision for non-inclusion of value of scrap where job worker has retained the sc .....

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peal dismissed - decided against appellant. - E/716/2010 - Final Order No. 40345/2018 - Dated:- 5-2-2018 - Ms. Sulekha Beevi, Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical) Ms. D. Naveena, Advocate for the Appellant Shri K. Veerabhadra Reddy, JC (AR) for the Respondent ORDER Per Bench The brief facts of the case are that the appellants had received CR coils/sheets for conversion into Electrical stampings and Laminations on job work basis. They discharged duty on aggregate va .....

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issued to them proposing demand of an amount of ₹ 3,96,687/- with interest thereon and imposition of penalties on various provisions. On adjudication, these proposals were confirmed and on appeal the Commissioner (Appeals) vide impugned order dated 28.09.2010 upheld the order of the original authority. Hence this appeal. 2. Today when the matter came up for hearing, Ld. Advocate, Ms. D. Naveena submits that as per Rule 6 of the Valuation Rules which was in force during the material period .....

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said judgment pertains to a period prior to 01.07.2000 for the earlier Valuation Rules when Rule 6 did not have the Explanation which was later introduced. She further submits that on similar issue for other another group company, vide OIA No. 69/2006 dated 26.03.2006 the Commissioner (Appeals) had allowed the appeal of Raaja Magnetics Ltd., on identical facts. Hence, the issue in their case can be said to be hit by limitation, since for the group company similar issue had been decided in their .....

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lling Mills Pvt. Ltd. decision was upheld and consequently confirmed by the Hon ble Supreme Court. 3.1 On the other hand, Ld. AR supports the impugned order. He submits that the ratio laid down by the Hon ble Apex Court in General Engineering Works judgement is very clear and the reduction of job charges to the extent of value of the scrap retained by them is an amount which has to be included in the assessable value in such cases. 3.2 On the plea of limitation, Ld. AR submits that the decision .....

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scrap arising out of manufacturing process were not retained by the job work but sold of by them: 5. It must be clarified that the value of scrap would be included in the value of the points and crossings only in case where it is shown that the conversion charges get depressed by the fact that the processor is allowed to keep and sell the scrap. Thus in the example given above, it would have to be shown that the conversion charges are ₹ 450/- because ₹ 50/- is earned from the sale o .....

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nnage for Rails will be 5% more than the net requirement of Rails required for different items of Switches, 5% being the manufacturing wastage. The total requirement of Rails for different items would be forwarded to you within ten days of receipt of your formal order. Manufacturing wastage of 5% has been considered and therefore this wastage will not be separately accounted for and shall not be returned. Any surplus materials received from you against the contract, will be returned to you and d .....

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case of Hindustan Engineering & Industries Limited v. CCE, Calcutta-I reported in 2002 (144) E.L.T. 418 (Tri. - Kolkata). In this case CEGAT has held that the value of scrap is not to be included in working out the value of points and crossings. CEGAT has so held on the basis that in working out the value of points and crossings, the entire value of the raw material supplied was taken into consideration and also that excise was being paid on the scrap which had been sold. CEGAT has so opine .....

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eration. The element of profit/conversion charges has to be added to the element of value of raw material used. The element of job work charges being separate element from the value of raw material, If it is shown that the job work charges/conversion changes get reduced then the value of scrap has got to be included in the value of the conversion charges. Similarly, even if excise is paid on scrap it would have no bearing on the working out of the value of the points and crossings. What is left .....

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dity has come into existence, the excise paid on the second commodity has no relevance in working out the value of the first commodity, i.e. points and crossings. The decision in Hindustan Engineering & Industries Limited s case (supra) will therefore stand overruled. 5.2 The Ld. Advocate has contended that the above judgment has been made in respect of the old Valuation Rules, which were in force prior to 01.07.2000, will not be applicable to their case. We are unable to appreciate this con .....

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