Custom, Excise & Service Tax Tribunal
Apte Amalgamations Ltd vs Commissioner Of Central Excise, ... on 19 October, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. Application No. E/MA(Ors.)94529/15 Appeal No.E/3237/06 (Arising out of Order-in-Appeal No. AT/529/Bel/2006 dated 24.8.2006 passed by the Commissioner of Central Excise (Appeals), Mumbai-II ) For approval and signature: Honble Mr. Ramesh Nair, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical) ============================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the : No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
====================================================== Apte Amalgamations Ltd.
:
Appellant VS Commissioner of Central Excise, Belapur :
Respondent Appearance Shri Vinay Ansurkar, Advocate for Appellant Shri H.M. Dixit, Assistant Commissioner (A.R) for respondent CORAM:
Honble Mr. Ramesh Nair, Member (Judicial)
Honble Mr. C.J. Mathew, Member (Technical)
Date of hearing : 19/10/2016
Date of pronouncement :16/11/2016
ORDER NO.
Per : Ramesh Nair
The fact of the case is that the appellant is engaged in the manufacture of pharmaceutical product on job work basis for M/s. Glaxo India Ltd. this matter earlier came before this Tribunal wherein this Tribunal vide order No. A/525/WZB/2005/C-III dt. 18.4.2005 remanded the matter to the original adjudicating authority with a direction that the valuation of goods should be done in accordance with the Rule laid down in the Ujagar Prints Etc.Etc. Vs. Union of India & Others 1989 (39) ELT 493 (S.C.). Thereafter the adjudicating authority did not accept the valuation done by the appellant on cost construction method only on the ground that the costing of the product was not proper or incorrect and accordingly the demand was confirmed and penalty of equal amount was imposed. Challenging the said order-in-original, the appellant filed appeal before the Ld. Commissioner (Appeals), who upheld the order-in-original and rejected the appeal filed by the appellant. The Ld. Commissioner (Appeals) has contended that the certain element was not added in the cots of product such as cost of DEO one of the raw materials and cost of packing material . It was also contended that the job work charges were shown as Rs.103/- per kg. whereas vide appellants letter dt. 10.5.2000, the job charges is Rs.109/- per kg., therefore the Chartered Accountant certificate was rightly rejected. Being aggrieved by the impugned order, the appellant is before us.
2. Shri Vinay Ansurkar, Ld. Counsel for the appellant submits that there is no dispute that the valuation of job work goods manufactured by the appellant is governed by the principle laid down by the Honble Supreme Court in the case of Ujagar Prints (supra). According to which the valuation should be done on the basis of cost of raw material + job charges including the profit of the job worker. He submits that as per the Chartered Accountant certificate the cost of DEO and packing material was included, the job charges of Rs.103/- per kg. was added in terms of the agreement between the appellant and the principal supplier therefore the C.A. certificate was wrongly rejected by the lower authority.
3. On other hand, Shri H.M. Dixit Ld. Assistant Commissioner (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order.
4. We have carefully considered the submissions made by both the sides. We find that there is no dispute about the method of valuation to be done in respect of job work goods of the appellant i.e. as per the principle laid down in the Honble Supreme Court judgement in the case of Ujagar Prints (supra). The only dispute raised by the lower authority is the quantum of cost of manufacture.. The Commissioner (Appeal) has contended that the Chartered Accountant certificate is not acceptable for the reason that the cost of DEO, one of the raw material and packing material was not added and the job work charges was added at the rate of Rs.103/- per kg. instead of Rs. 109/- per kg. In this regard, we have perused the Chartered Accountant certificate which appended below:
From the above certificate, it is clear that the cost of DEO at Sr. No. 19 and packing material at Sr. No. 20 was included. We find that job charges of Rs.103/- per kg. added which as per the agreement between the appellant and the principal supplier of the raw material. The relevant clause of the agreement is reproduced below:
6(i) Glaxo shall pay to AAL a sum of Rs.103@ kilo towards total conversion charges including the cost of fuel, and fixed advance adjustment of Rs. 35@ kg. From the above clause, it is clear that the job charges is Rs.103/- per kg., therefore there is no reason to take the job charges as Rs. 109/- per kg. In view of the above facts, it is very clear that the entire basis for rejecting the value declared by the appellant is factually incorrect. We, therefore, find that the valuation was done by the appellant and certified by the Chartered Accountant in the above referred certificate is correct. Accordingly, the impugned order does not survive, hence the same is set aside. The appeal is allowed. Miscellaneous application is also disposed of.
(Pronounced in court on 16/11/2016 )
(C.J.Mathew)
Member (Technical)
(Ramesh Nair)
Member (Judicial)
SM.
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E/MA(Ors.)94529/15
E/3237/06