TMI Blog1986 (12) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessable value of the processed fabric in the hands of the processor who does job work in respect of grey cloth supplied by the manufacturer or trader. Refer these writ petitions and appeals to a larger Bench of five Judges. Of course, when these writ petitions and appeals are referred to the larger Bench it will be open to the larger Bench to consider not only the question of determination of the assessable value but also the other question, namely, whether processing of grey fabric by a processor on job work basis constitutes manufacture, because the judgment in Empire Industries case (1985 (5) TMI 215 - SUPREME COURT OF INDIA) which has decided this question in favour of the Revenue and against the processor is a Judgment of a Ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis amount to manufacture both under the Act it stood prior to the amendment as also under the Act subsequent to the amendment and the processed fabrics are liable to be assessed to excise duty in the hands of what may be called 'jobbers'. Since this was a decision giver by a Bench of three Judges, the petitioners and appellants who are carrying on business of processing on job work basis could not contend that these processes do not amount to manufacture and that the processed fabrics are not liable to be assessed to excise duty in the hands of the jobbers. But, it was the second question which provoked serious controversy before us. So far as this question is concerned, it was also incidentally argued in the Empire Industries' case (Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rket and that would be taken by the Excise authorities as the assessable value of the processed fabrics and excise duty would be charged to the processors on that basis. This may be illustrated by giving the following example : (1) Value of grey cloth in the hands of the processor Rs. 20.00 (2) Value of job work done Rs. 5.00 Value of finished cloth returned to the trader (1+2) Rs.25.00 (3) Trader's selling price inclusive of his selling profits, etc. Rs.30.00 The assessable value in the case given in this example would be taken by the Excise authorities at Rs. 30/- which was the sale price of the trader. There were also instances where, on finding that the trader had sol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. - 1984 (1) SCR 347 = 1983 (14) E.L.T. 1896 that under the Central Excises and Salt Act and the Rules made thereunder the assessable value of the manufactured goods is to be determined at the factory gate that is at the stage when the manufactured goods leave the factory and enter the main stream. We may assume and indeed in view of the decision of this Court in Empire Industries case (supra) we must so assume, that processing of grey fabrics involves manufacture and that when the processor carries out processing on the grey fabric he manufactures the processed fabric: But the assessable value of the processed fabric must obviously be taken to be the wholesale cash price of the processed fabric at the factory gate that is when the process ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessable value of the processed fabric which would comprise the value of the grey cloth and the job work charges but exclude the profit at which the trader may subsequently sell the processed fabric. 6. This according to us the correct mode of determination of the assessable value of the processed fabric in the hands of the processor who does job work in respect of grey cloth supplied by the manufacturer or trader. We would have proceeded to decide these writ petitions and appellants on the basis of this view which we are inclined to take but we find that in Empire Industries case (supra) Mukharji, J. speaking on behalf of a Bench of three Judges has expressed a view which is different from the one we are taking and though that vie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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