TMI Blog2020 (3) TMI 308X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the urinal casings from M/s. Roca by transaction of purchase and sale. Merely because the goods manufactured by M/s. Inova bear the brand name of M/s. Roca, the Department has viewed the transaction as a manufacture done by a job worker on behalf of the principal manufacturer. The very same issue decided in the case of SUJHAN INSTRUMENTS VERSUS COMMISSIONER OF CENTRAL EXCISE, CHENNAI-II, HONEYWELL ELECTRICAL DEVICES AND SYSTEMS INDIA LTD. VERSUS PRINCIPAL COMMISSIONER OF CENTRAL EXCISE, CHENNAI-I AND COMMISSIONER OF GST CENTRAL EXCISE, CHENNAI VERSUS SUJHAN INSTRUMENTS [ 2018 (7) TMI 420 - CESTAT CHENNAI ] where it was held that when the transaction is on principal to principal basis, the allegation that the assessee is manufacturing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to various depots of M/s. Roca on sale basis as per the purchase order. The price of the goods was arrived at by M/s. Inova by cost construction method with some profit margin. This cost construction price was subjected to negotiation with M/s. Roca to arrive at the agreed price, on which the duty was paid. All these activities were governed by the conditions laid down in the agreement entered between M/s. Inova and M/s. Roca (previously known as Parryware Division M/s. EID Parry (India) Ltd.). In March 2006, the Parryware Division was hived off and a new company known as M/s. Parryware Glamourooms Pvt. Ltd. was formed. After entering into a joint venture with M/s. Roca, Spain, the name of the company M/s. Parryware Glamourooms Pvt. Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration for sale as per Section 4 (1) (a) of the Central Excise Act, 1944. That with effect from 01.04.2007, the valuation of goods manufactured by job workers should be as per clause (ii) of Rule 10A of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. 3. Show Cause Notice dated 24.04.2012 was issued to M/s. Inova raising a demand of differential duty for the period from 01.04.2007 to 31.12.2011 along with interest and also proposing to impose penalties. Show Cause Notice was also issued to M/s. Roca proposing to impose penalty under Rule 26 of the Central Excise Rules, 2002. After adjudication, the Original Authority vide order impugned herein confirmed the demand raised against M/s. Inova along with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the Show Cause Notice, it goes without saying that the urinal casings are then the property of the appellant i.e. M/s. Inova. Thus, even before manufacture takes place, the goods are the property of M/s. Inova and does not belong to M/s. Roca. M/s. Inova is an independent entity having independent infrastructure and they did not manufacture goods on behalf of M/s. Roca. Since the title of these goods belong to the appellant, the conditions for becoming a job worker is not satisfied. 4.3 He relied upon the decision of the Tribunal in the case of M /s. Sujhan Instruments v. Commissioner of Central Excise, Chennai-II reported in 2019 (368) E.L.T. 135 (Tri. - Chennai) to argue that the very same facts were considered by the Tribunal i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lined to treat Sujhan as a job worker of Honeywell primarily on the grounds that supplies of raw materials that required to be approved by the latter, quality control exercised by Honeywell, 99% of the finished goods are sold to the latter and that Honeywell s brand name and MRP stickers are used on the packing. The Rule 10A has been inserted in the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, w.e.f. 1-4-2007. As per this rule, the value at which principal manufacturer sells his goods will be the basis for determining the transaction value for payment of Central Excise duty by the job worker. For the purpose of this rule, the job worker is defined as .. a person engaged in the manufacturer or production of g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , is on the lines of contract manufacturing as distinguished from job worker . The contract manufacturers are not supplied with the raw material from principal manufacturers, like job workers , but they are required to purchase them from the market, very often from vendors who are approved by the principal manufacturer for quality point of view. The principal then buys finished products from the contract margin and very often sales them to his core customer, sometimes with enhanced margin. Department has also not unearthed or brought out anything on record to suspect that the contract between Sujhan and Honeywell is only a camouflage for job working. There is also no evidence put forth to indicate that apart from the alue invoices by Su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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