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TMI Blog2025 (1) TMI 422X X X X Extracts X X X X X X X X Extracts X X X X ..... d duty at full rate w.e.f. 24.09.2013 beyond the threshold limit of SSI exemption. Upon verification by the department, it appeared that the value adopted by the Appellants by considering the cost of materials plus conversion cost, was not in accordance with Rule 10A (iii) read with Rule 8 of Central Excise Valuation Rules, 2000 (CEVR)resulting in short payment of duty. Hence, Show Cause Notices No. 30&31/2015 both dated 01.07.2015 were issued to the Appellant for the periods April 2013 to March 2014 and April 2014 to December 2014 respectively, proposing to re-determine the value and demand differential duties of Rs.4,38,514/- and Rs.3,34,457/- under Section 11A of the Central Excise Act, 1944 (Act) along with applicable interest and to impose penalty under Section 11AC of the ACT. The Adjudicating Authority vide Orders-in-Original No. 1/2016 dated 28.03.2016 and 02/2016 dated 31.03.2016, confirmed the demands and imposed penalties under Section 11AC(b) of the ACT/ Rule 27 of Central Excise Rules, 2002(Rules) respectively. Being aggrieved, the Appellant preferred appeals before the Commissioner (Appeals-II) who vide the impugned order upheld the Orders-in-Original in so far as dem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er. Further reliance was also placed on the ratio of the Apex Court's decision in the case of CCE Vs. Aqua Pet Industries [2013-TIOL-07-SC-CX]. 5. The Ld. Authorised Representative Smt. O.M. Reena, representing the Department affirmed the findings of the Lower Appellate Authority and submitted that the Appellant had not adopted correct valuation in terms of Rule 10A (iii) read with Rule 8 of CEVR,2000 and therefore Appellant was liable to pay differential duty. It was pointed out that the Appellant had contravened the provisions of CEVR with an intent to evade duty payment and hence the demands confirmed are sustainable. Hence it was prayed for dismissal of the appeals filed by the Appellant. 6. We have carefully considered the submissions made by both the sides and also evidences available on records. 7. The only issue which arise for decision in these appeals is whether the value to be adopted for job worked goods was in terms of Rule 10A (iii) read with Rule 8 of CEVR, 2000? 8. We find that the Appellants have manufactured HDPE Plastic Caps on job work basis and have paid duty on the assessable value worked out by taking into account the cost of materials plus conversion cos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ir clearance from the factory of job-worker and where the principal manufacturer and 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 normal transaction value of such goods sold from such other place at or about the same time and, where such goods are not sold at or about the same time, at the time nearest to the time of removal 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 engaged in the manufacture or production of goods on behalf of a principal manufacturer, from any inputs or goods supplied by the said principal manufacturer or by any other person authorised by him." 7.1 It can be seen from the above reproduced provisions that provisions of Rule 10A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said LABSA is the intermediate product required by HUL which is manufactured or produced by the appellant as a job worker. The key words in Rule 8 that needs to be interpreted are 'consumption by an assessee or on his behalf' for applying the said Rule for arriving at valuation or determination of goods. In the case in hand, it is very clear and not disputed that the appellant is not consuming the said LABSA nor is it consumed on his behalf by HUL. In our considered view, the provisions of Rule 8 will not get attracted in this case. . . . 11. That still leaves us with a question of how the determination of value has to be done as provided under Rule 10A(iii). By elimination of Rule 2 to 10 as they may not apply in a situation like in this case provisions of Rule 11 will apply and Revenue has to take the recourse to provisions of Rule 11 which talks about using reasonable means consistent with the principles and general provisions of these rules read with sub-section (1) of Section 4 of Central Excise Act, 1944. Keeping this in mind, we find that the ratio laid down by the Hon'ble Supreme Court in the case of Ujagar Prints and followed by various other decisions of this Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X
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