Customs, Excise and Gold Tribunal - Delhi
D.B.S. Industries And Ors. vs C.C.E. on 2 April, 2004
ORDER
K.K. Usha, J. (President)
1. The issue raised in these appeals is common. Therefore, we proceed to dispose of all the appeals under a common order.
2. The appellants are engaged in the manufacture of PP/HDPE fabrics and sacks falling under sub-heading 3926.90 and 3923.90 respectively. The goods manufactured are sold at the factory gate on payment of duty. In addition to the sale of the fabrics and sacks at the factory gate, the appellants stock transfer some quantity of the fabrics manufactured to their godown. They are sent to the job worker for conversion into sacks. Sacks so received from the job workers are sold to the customers. The department took the view that fabric stock transferred to godown should be valued on the basis of the selling price of the sacks. The adjudicating authority as well as the Commissioner (Appeals) affirmed the duty demand and penalties imposed on the assessees.
3. It is contended on behalf of the appellants that the value of the goods in the form in which they are cleared from the factory is to be adopted and not the value of the goods after conversion done by the job workers. In support of the above contentions, the appellants placed reliance on the decisions of this Tribunal in the case of (a) Savita Chemicals Ltd. vs. C.C.E. 2000 (119) ELT 394 affirmed by the Supreme Court in 2002 (130) ELT A 262 (SC) (b) Castrol India Ltd. vs. C.C.E. - 2000 (118) ELT 35 affirmed by the Supreme Court in 2001 (121) ELT a\A 224 (SC) and (c) Malwa Cotton Spg. Mills vs. C.C.E. - 2001 (132) ELT 671.
4. Learned Departmental representative submitted that since the sacks which are received back from the job workers were cleared from the appellants depot, the conversion charges at the hands of job workers has also to be added to the assessable value. In view of the above submissions, according to the leaned SDR, the orders impugned are not liable to be interfered with.
5. We find merits in the contentions raised by the appellants. The ratio of the decisions relied upon by the learned Counsel for the appellants is strictly applicable to the facts of the present cases. In Malwa Cotton Spg. Mills Ltd. case, the appellants cleared the grey yarn manufactured in their factory to their depots. The grey yarn were sold as such to wholesale dealers. Certain portion of the yarn were sent to job workers for dyeing. From the job workers. the dyed yarn is received back. They were subsequently sold to other dealers. Rejecting the stand taken by the Revenue the Tribunal took the view that even if the process of dyeing involves manufacture, the job worker is carrying on the manufacturing process. So, that job worker alone is to be made liable for duty on that manufacturing process. It was held that assessable value in respect of grey yarn cannot take in the cost of dyeing.
6. We are of the view that if the ratio of the above decisions are applied to the facts of the present cass the cost of the job workers cannot be added to the assessable value of the fabrics manufactured and cleared by the assessee. In view of the above. we set aside the orders impugned and allow the appeals.