TMI Blog2002 (9) TMI 133X X X X Extracts X X X X X X X X Extracts X X X X ..... Since the original Bench before which these appeals came up for hearing found it difficult to accept the above proposition as correct in the light of the decision of the Supreme Court in Ujagar Prints Etc. v. Union of India Others - 1989 (39) E.L.T. 493 (S.C.), these appeals are referred for consideration by a Larger Bench. Appeal No. E/2206/2001-A with E/Cross/266/2001-A : 2.The respondent M/s. Bhilwara Processors Ltd. are engaged in the processing of woollen fabrics and manmade fabrics for various parties including M/s. BSL Ltd., Mandpam, Bhilwara on job work basis. The assessable value of processed fabrics was determined on cost construction method taking the landed cost of the raw material (grey fabrics) and the processing charges. For this purpose the processor filed price declarations in which the cost of raw material i.e. woven fabrics (grey fabrics) was taken as per the declarations filed by M/s. BSL Ltd. The grey fabrics were being manufactured by M/s. BSL Ltd. in their weaving division from yarn manufactured in their own spinning unit at Bhilwara and from yarn purchased from outside also. Since the value of varieties of yarn manufactured and consumed captively in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . as well as undertaking to discharge all liabilities under the Act. Therefore, it was the responsibility of the processor to ensure that the value for the purpose of payment of duty on the processed fabrics was correctly determined. M/s. BSL Ltd. has also the responsibility to ensure that the cost was correctly declared to M/s. BPL. According to the learned DR the decision of the Supreme Court in Ujagar Prints would in no way stand against the Revenue enquiring into the real cost of the grey fabric. The observations contained in the decision of this Tribunal in Sangam Processors to the contra has to be reconsidered. 4.On the other hand, the learned Counsel appearing on behalf of the respondent submits that on going by the decision of the Supreme Court in Ujagar Prints as well as the decision of this Tribunal in Sangam Processors, the value declared by M/s. BSL Ltd. should have been accepted by the Revenue and no further enquiry should have been made into it. 5.We will first refer to the clarificatory order of the Hon'ble Supreme Court in Ujagar Prints Etc. Etc. v. Union of India Others - 1989 (39) E.L.T. 493 (S.C.) on its decision in Ujagar Prints. Etc. Etc. v. Union of Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r expenses. It is necessary to include the processor's expenses, costs and charges plus profit, but it is not necessary to include the trader's profit who gets the fabrics processed, because those would be post-manufacturing profits." From the 1st paragraph of the order it is clear that the assessable value has to be found out by adding to the value of grey cloth in the hands of the processor plus the value of the job work done plus manufacturing profit and manufacturing expenses. This would be taken as the price at the 'deemed' factory gate as if the processed fabric was sold by the processor. Value of the grey cloth is the essential component of the deemed price. The dispute that has arisen in the present case is whether the department is debarred from going into the correctness of the value of the grey cloth declared by M/s. BSL Ltd. We do not find any reference in the order of the Supreme Court to a declaration by the trader (in the present case is M/s. BSL Ltd.) as to the value of grey fabric. On the other hand, reference is made to a declaration regarding the selling price of the processed goods in the market. Paragraph 2 of the order refers to the trader's selling price in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpugned order including imposition of penalty and remand the matter to the Commissioner (Appeals) for fresh consideration in the light of the observations contained in the order. Appeal Nos. E/1874-1875/2001-A : 7. The appellants are engaged in the manufacture of fabrics on job work basis. During inspection of the godown and processing unit of the appellant, officers of the department found that the weight of grey fabrics per metre was in excess of the weight declared by the assessee in their respective price declaration filed under Rule 173C read with Notification No. 27/92-C.E. (N.T.), dated 9-10-92. In accordance with the provisions of above notification traders/weavers who got their fabrics processed from the assessee were filing authorisation in favour of the assessee. The assessee was filing a price declaration under Rule 173C along with the break up of the cost elements of the price at which such goods were sold by such traders/weavers after processing. The duty was paid on the value determined on the basis of the cost elements furnished in the cost sheet enclosed with the price declarations in accordance with the principles laid down in Ujagar Prints v. UOI read with Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X
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