Customs, Excise and Gold Tribunal - Delhi
Kosan Industries Ltd. vs Collector Of Central Excise on 19 May, 1997
Equivalent citations: 1997(95)ELT62(TRI-DEL)
ORDER Lajja Ram, Member (T)
1. In this appeal filed by M/s. Kosan Industries Ltd., formerly known as Kosal Metal Products Pvt. Ltd., the matter relates to the enhancement of margin of profit in respect of the raw materials supplied by the customers while arriving at the assessable value of the LPG cylinders. The appellants were engaged in the manufacture of LPG cylinders out of the raw material supplied by their customers who were oil companies. The assessable value were declared on the basis of the cost of raw materials plus job charges recovered by the appellants from the oil companies. The Revenue sought to add the margin of profit to the steel sheets which had been imported by the oil companies and had been supplied to the appellants for manufacturing LPG Cylinders. The Additional Collector of Central Excise, Nagpur who adjudicated the matter added the notional margin of profit at the rate of 10 per cent of the cost of the value of the cylinder. The order passed by the Additional Collector, Central Excise, Nagpur was confirmed by the Collector of Central Excise (Appeals) Bombay who held that as the fabrication charges recovered by the appellants represent only the manufacturing cost, the Additional Collector was justified in adding a reasonable margin of profit under Rule 6(b)(4) of the Valuation Rules.
2. The appellants have prayed for decision on merits. In the written submissions, they had referred to the Tribunal's decision in the case of Nagpur Fabriforge Pvt. Ltd. and Kosan Metal Products v. CCE, Nagpur in Appeal Nos. E/665/86-A and E/670/86-A. The Tribunal under their Final Order No. 2373 to 2374/96-A, dated 9-4-1996 had observed that oil companies who supplied the raw materials were not the manufacturer for the purpose of the Central Excise Law and that their margins of profit would not be added to the assessable value in the hands of the manufacturer who manufactured LPG cylinders out of the raw materials supplied by the Oil companies.
3. As the facts are similar to the one which were before the Tribunal while deciding the Final Order No. 2373-2374/96-A, dated 9-4-1996, following the above decision, we do not agree with the view taken by the ld. Collector of Central Excise (Appeals) Bombay. Following the said decision, we allow the appeal and order accordingly.