TMI Blog2005 (12) TMI 177X X X X Extracts X X X X X X X X Extracts X X X X ..... at situation also, the other appeal was dismissed as not maintainable. It is also found that the Commissioner's reasoning to drop the Show Cause Notice is correct in law. M/s. Nestle India Ltd. was supplying the raw material. They had given loan for purchase of machinery but it had not influenced the pricing and the assessable value of the goods manufactured by the assessee as an independent job worker. The value of the job worker alone is required to be adopted in terms of the Apex Court judgment rendered in the case of PAWAN BISCUITS CO. (PVT.) LTD. VERSUS COLLECTOR OF CENTRAL EXCISE, PATNA [ 2000 (7) TMI 78 - SUPREME COURT] which has followed the earlier judgment of the Apex Court rendered in the case of UJAGAR PRINTS ETC. ETC. VERSUS UNION OF INDIA OTHERS [ 1989 (1) TMI 124 - SUPREME COURT] . There is no flow back of funds and the assessee herein does not have interest in M/s. Nestle India Ltd.'s profits. There is no mutuality of interest and the relationship was on principal-to-principal basis. In view of this settled position of law, dropping of proceedings by the Commissioner in both these orders is correct, legal and proper. There is no merit in these appeals and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le India for purchase of certain machineries. This was denied by the respondents that the loan granted for purchase of machinery had any effect on the pricing of the goods. There was no extra consideration given by M/s. Campco to M/s. Nestle on that basis. The Commissioner was satisfied with the submissions made by both units of being independent units and working at arm's length and on principal-to-principal basis. He accepted the contention of the respondents that they were job workers and the price adopted for the job work should be accepted and not the selling price of M/s. Nestle India Ltd. The relevant portion of his finding in Paras 9.2 to 9.5 in OIO No. 9/98, dated 22-10-1998 (E/1686/99) is reproduced herein below :- "9.2 Now, in the instant case, though it is true that Nestle had given interest free loans to Campco, there is no evidence to show that Campco had adopted a lower, assessable value for the clearance of Nestle products. The price adopted by Campco for clearances of their own branded chocolates and the price adopted for the job-work clearances of Nestle are not comparable and as such, it cannot be said with certainly that Campco adopted a lower selling price in c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only. The Supreme Court's decision in the Ujagar Prints case 1989 (39) E.L.T. 493 (S.C.) clearly spells out the guidelines to be adopted in respect of valuation of goods produced on job-work basis and settles once for all the disputes relating to the prices to be adopted in such cases. The judgement in MRF case etc. - 1995 (77) E.L.T. 433 (S.C.) are only a refinement of the Ujagar judgment without altering the basic ruling. In terms of Notification No. 305/77-C.E., dated 5-11-1977, issued under Rule 174 of Central Excise Rules, 1944, when goods owned by one person are manufactured by another person, the owner of the goods is required to give a declaration to the job-worker as to what would be the price at which he would be selling the goods (manufactured on job-work basis) in the market and that price would be taken by the Central Excise Department as the assessable value of the goods so manufactured by the job worker in the Ujagar Prints case cited above, the Supreme Court had held that such prices (i.e. the price filed in the declaration given under Notification No. 305/77) would include only the cost of raw materials + job charges and expenses + job-worker's profit, but not any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods were actually paid by Nestle, and the same had not been included by Campco in the assessable value. It is only alleged that the commitment charges was bifurcated and certain amount apportioned as identifiable wit the semi-finished goods were borne by Campco itself since Nestle never lifted such semi-finished goods; and such commitment charges borne by Campco were to form part of the assessable value and duty was to be paid on the same. If Nestle didn't lift those goods, then what is the nature of their disposal? Was Campco permitted to dispose them off at their own will and pleasure? Or did they remain in stock without being cleared to Nestle? Thus, I find the proposal to demand duty on commitment charges pertaining to semi-finished goods is purely on imaginary grounds. The question of demand would arise only in cases where such charges paid by Nestle were not included by Campco in their Assessable value and declared the same in the price lists filed to the Department. Here, the investigation has not provided evidences to answer these queries. As such, I do not find any basis for demand of duty on commitment charges. 10.1 Further, the Hon'ble Supreme Court had held in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estigated by the Anti-Evasion officials became part of the present Show cause notice. It suffers from a lot of infirmities and also appears to be time barred." 4. We have heard both sides in the matter. 5. The learned SDR took us through the grounds made out in the appeal and contended that M/s. Nestle India Ltd. had advanced huge amounts of more than Rs. 4.5 crores in investment for purchase of Plant and Machinery. That itself is a sufficient ground to reject the assessable value of M/s. Campco and to proceed on the sale price of M/s. Nestle India Ltd. It is contended that the relationship between M/s. Campco and M/s. Nestle India Ltd. was not on principal-to-principal basis. 6. The learned Counsels submitted that this advance of the amount has not effected the pricing and the price, at which the other job workers manufac-turing the goods, was same as in respect of the goods manufactured by M/s. Campco. M/s. Campco was not given any preference because of the loan taken by them. There was no mutuality of interest between each other and that M/s. Campco was not a dummy. There was no suppression of facts and, therefore, the question of rejecting the assessable value of M/s. Campco do ..... X X X X Extracts X X X X X X X X Extracts X X X X
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