Customs, Excise and Gold Tribunal - Tamil Nadu
Chemdye Manufacturing Co. (P) Ltd. vs Cce on 7 October, 2003
Equivalent citations: 2004(113)ECR799(TRI.-CHENNAI)
ORDER Jeet Ram Kait, Member (T)
1. This appeal is directed against the order in appeal No. 5/02 (M-III)(D) dt. 15.7.2002, by which the Ld. Commissioner (Appeals) has allowed the appeal filed by the revenue by setting aside the order in original No. 19/00 dt. 18.8.2000, by which the original authority had dropped the proceedings initiated in the matter against the appellants.
2. Shri M.V. Raman, appearing on behalf of the appellant/assessee, submits that they have been undertaking the job work for M/s. Thirumalai Chemicals Ltd. (M/s. TCL) since 1998 and they had received raw materials from M/s. TCL and processed them into plasticisers and cleared them on payment of duty adopting the sale price of M/s. TCL.
He also submitted that for a temporary period of time M/s. TCL had to sell the plasticisers at a price less than the cost price due to adverse marketing condition and accumulation of huge inventories and that such sale at less than the cost price is not barred under Section 4 of the Central Excise Act 1944. Therefore, the question of under valuation does not arise and sought the impugned order to be set aside. In this connection, the Ld. Advocate has referred to the judgement rendered by the Apex Court in the case of CCE, New Delhi v. Gurunanak Refregeration Corporation reported in 2003 (153) ELT 249 (S.C.) : 2003 (108) ECR 13(SC), which was an appeal from order of the Tribunal as . In this case, the Apex Court had held that where normal price within the meaning of Clause (a) of Sub-section (1) of Section 4 of Central Excise Act, 1994 is ascertainable, the provisions of Clause (b) ibid cannot be resorted, to determine the nearest ascertainable equivalent of the normal price of the goods and the Tribunal's order was upheld by the Apex Court. He also submitted that there was no allegation of flow back of money from the buyer to the assessee and in the absence of these factors it cannot be contended that normal price was not ascertainable.
3. Ld. DR Shri C. Mani, who has submitted para-wise comments filed by the Commissioner of Central Excise vide his letter C.No. V/30/2/81/2002 JC dt. 12.5.2003, the Ld. DR has relied on the Supreme Court judgement rendered in the case of Ujagar Prints v. Union of India reported in 1989 (39) ELT (SC) : 1989 (21) ECR 1 (SC) : ECR C 1347 SC. The value in the case of job work should necessarily include the cost of manufacture and job worker's profit as per the Apex Court's judgement. He also tried to distinguished judgement rendered by the Supreme Court in the case of CCE, New Delhi v. Guru Nanak Refrigeration Corporation. Since in that case, the sale was affected by the manufacturer and not by the job worker. He also relied on the comments submitted by the department vide their letter C.No. V/30/2/81/2002-JC dt. 12/05/2003.
4. We have considered the rival submissions and are of the considered opinion that the price at which the goods are being sold by the main manufacturer have been adopted by the job workers and the judgement rendered by the Apex Court in the case of Ujagar Prints would be applicable only to those cases where the prices is not ascertainable in respect of the main manufacturers. Since the price charged by the main manufacturers has been adopted by the job workers and since it is temporary phase and the goods can be sold at the price less than the cost of the goods as held by the Apex Court in the case of CCE, New Delhi v. Guru Nanak refrigeration Corporation (supra). We also observe that the Assistant Commissioner of Central Excise, Ranipet Division in his Order No. 19/2000 dt. 18.8.2002, had gone through the case records in detail and he had found that M/s. TCL vide Notification No. 305/77 and later on vide Notification No. 27/92 (NT) dt. 14.5.1992, have authorised M/s. CMC to manufacture on their behalf and to observe all Central Excise formalities on their behalf i.e. M/s. TCL. He had also observed that M/s. CMC for the purposes of payment of duty always adopted the sale price of M/s. TCL for the plasticisers and it was in this background that he had dropped the proceedings initiated in the matter. In view of the above facts and circumstances, we find that the Ld. Commissioner (Appeals) has misdirected himself by applying the judgement rendered by the Apex Court in the case of Ujagar Prints v. UOI and Ors. (supra). We also do not agree with the conclusion arrived by the Ld. Commissioner on the Supreme Court decision in the case of Gurunanak Refrigeration Corporation (supra) wherein he opined that the judgment is not relevant to the present cases. We therefore, respectfully following the judgement rendered by the Apex Court in the case of CCE, New Delhi v. Gurunank Refrigeration Corporation (supra), allow the appeal by setting aside the impugned order. Ordered accordingly.
(Dictated and pronounced in open Court)