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CX - HLL clearing soap in bulk to job-worker for packing as multi-piece packages - while paying duty, valuation derived based on comparable AV of similar goods - allowing adjustment on account of cost of packing material appears reasonable: CESTAT

By TIOL News Service

 

MUMBAI, SEPT 07, 2015: APPELLANT is manufacturing soaps and clearing the same in bulk to job-worker, namely, M/s Ashapura Industries, who in turn were packing the individual soaps in multi-piece packaging. The individual soaps cleared by HLL were not marked with any MRP, however, the multi-piece pack was marked with MRP. Multi-piece packs also contain higher MRP, which was crossed and a lower MRP was indicated for sale and purchase of multi-piece pack. The declared assessable value at the end of the appellant is a derived value based on a comparable assessable value of similar goods cleared from the premises of the job-worker except for the adjustment to the extent of cost of carton.

SCNs were issued to appellant seeking to levy duty at the higher MRP (which was crossed out) printed on the multi-piece packaging.

The Dy. Commissioner dropped the demand by relying on the Circular No. 673/64/2002-CX dated 28.10.2002 issued by CBE&C.

Subsequently, the order was reviewed and an appeal was filed on two grounds viz. Board Circular does not apply and secondly that the deduction of the cost of carton claimed by the appellant in their clearance to M/s Ashapura Industries is not admissible. The Commissioner (Appeals) accepted the second ground and allowed the appeal.

The appellant is before the CESTAT.

The Bench held -

"6. The Revenue has already accepted the valuation of the goods cleared from M/s Hindustan Lever Ltd. on the basis of assessable value of similar goods (except for the packing material) cleared from the job-worker's premises. The only difference between the goods cleared from the appellant premises and their job-worker's premises is a packing. Therefore, it is only just to say that difference between the values of the two clearances is only the cost of packing material. Under Rule 11 it would appear reasonable to allow the adjustment on account of cost of packing material as claimed by the appellant."

The appeal was allowed.

(See 2015-TIOL-1881-CESTAT-MUM)


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