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TMI Blog2018 (12) TMI 931X X X X Extracts X X X X X X X X Extracts X X X X ..... a Enterprises Pvt Ltd arising from their conversion contract with M/s Tata Power Company Ltd requiring the latter to supply 'steel angles' and 'zinc'. The appellant discharged tax liability on Rs. 27,500 per metric ton for 'MS steel parts' and at Rs. 29,000 per metric ton for 'HT steel parts' as declared by the principal. 2. Relying upon circular no. 619/10/2002-CX dated 19th February 2002 of Central Board of Excise & Customs, which mandated valuation of goods manufactured by 'job worker' to comply with rule 11, read with rule 6, of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 along with the judgement of the Hon'ble Supreme Court in Ujagar Prints Ltd [1989 (39) ELT 493 (SC)] and Pawan Biscuits Co Ltd [20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable to be paid on clearances effected by them. The upward revision of the conversion charges adopted by central excise authorities was also disputed by appellant. According to them, notwithstanding the adoption of contemporary prices for the raw material supplied free of cost and the revision in conversion charges to which they have objected, the duty liability arising from these additions would yet not render them liable to any recovery as the declared value on which duty liability was discharged by them had the effect of payment of duty in excess. 4. It would appear that, other than the confirmation of duty liability on the cost of 'prototype', the dispute is thus limited to the value assigned to the scrap arising from the conversion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant or elsewhere. Similarly, it is not ascertainable if the prototype is assembled in the premises of the appellant or at another location after clearance of the disassembled parts. In the absence of any such evidence, it is impossible to crystallise the leviability of duty, if at all. It was in almost identical circumstance that the Tribunal held in Commissioner of Central Excise, Mumbai - II v. Jyoti Structures Ltd [2004 (170) ELT 190 (Tri -Del)] that 'destruction testing' erases the prototype out of existence and, thereby, of dutiability. In arriving at this decision, the contention of Revenue that the cost of assembling and destruction, of prototype should be included in the value of clearances of finished goods was not found sustain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... principal. That is not a claim in the present dispute thus, unambiguously, requiring discharge of duty liability on the goods manufactured by the appellant even as a 'job worker'. The contention of the appellant that payment of duties on the basis of the price declared by the principal as per contractual agreement suffices is, ex facie, not acceptable without the test of the computation of liability by the appropriate rule in Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. 9. Revenue contends that circular no. 619/10/2002-CX dated 19th February 2002 of Central Board of Excise & Customs requires application of rule 11, read with rule 6, of the said Rules and the two seminal decisions of the Hon'ble Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding in the impugned order on the manner in which the conversion charge has been influenced by the retention of 'scrap' with the appellant. Nevertheless, as advised by the Hon'ble Supreme Court in re General Engineering Works, we take note that the provision in the contract pertaining to '14. Wastage of Raw Materials As TCPL's role shall be limited to placement of Order on vendors nominated by AEPL, and release of payment to them as per the terms finalised by AEPL, AEPL shall be fully responsible for wastage and no additional liability shall be passed on to TCPL. AEPL shall be the owner of all scrap and wastage.' is not a privilege accorded to the appellant but is intended to ensure that the vendors identified by the appellant do not co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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