Ujagar Prints Etc vs Union Of India & Ors. Etc on 4 November, 1988
1. The issue involved in this appeal is levy of Central Excise duty on processing charges. Arguing the appeal, learned Counsel Shri R.K. Kapoor submits that according to Supreme Court judgment in Ujagar Prints v. Union of India and Ors. reported in 1989 (39) ELT 493 (SC) : 1989 (21) ECR 1 (SC) : ECR C 1347 SC, the processor is to pay duty only on the processing charges up to the factory gate of the processor. In the instant case the appellants were receiving fabrics from several suppliers and were returning the goods after processing. They were collecting only processing charges from the supplier of the fabrics. However, they used to pay duty on value inclusive of the post manufacturing expenses. Shri Kapoor submits that on merits duty paid on amounts in excess of the processing charges plus value of the fabrics was liable to be refunded to them. Their refund claims in this regard have been rejected partly on the ground that claims amounting to about Rs. 83 lakhs were time barred and, that in respect of the remaining claims the goods have been correctly assessed at the ex-factory price. Shri Kapoor submits that findings on both the counts are erroneous and not sustainable. With regard to the finding that the claims were time barred, he submits that the payments have been made under protest. He refers to page 15 of the order of the Assistant Collector where it has been admitted that the ground for protest was that Central Excise duty was chargeable only on the processing charges. This would clearly show that the protest was on the valuation of the goods and not on any other ground. With regard to the second ground, Shri Kapoor submits that the appellants' concern was to pay duty on a value which included the cost of the fabric and cost of processing and not on any other count, as per the aforesaid judgment of the Supreme Court. The denial of refund is contrary to this decision and is, therefore, liable to be set aside.