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CX - Job work - when sale price of very same goods is available, there is no need to adopt value which is arrived on basis of valuation rules: CESTAT

By TIOL News Service

MUMBAI, NOV 01, 2017: THE appellant is engaged in the manufacture of E.R.W. Tubes on job works basis on behalf of the M/s. TISCO (Tube Division). The appellant cleared the job-worked goods on payment of duty by adopting the value at which the said goods were sold by principal M/s. TISCO.

From July, 2004 onwards, steel sheets were supplied by TISCO to another job worker M/s. Alco Steel Pvt. Ltd ., who carried out slitting of the same and the strips were supplied on payment of duty by M/s Alco Steel Pvt. Ltd to the appellant for conversion into steel tubes on behalf of principal M/s TISCO.

The case of the department is that valuation in the hand of the appellant should be as per theprinciplelaid down by the Supreme Court in case of M/s Ujagar Print 2002-TIOL-02-SC-CX according to which valuation should be equal to the landed cost of the raw material plus job work charges.

Accordingly, SCNwas issued demanding differential CE duty and which was confirmed by the lower authorities.

In appeal before the CESTAT, it is submitted that the appellant have adopted the actual sale price at which principal M/s TISCO have sold the goods to the independent customers, therefore, when sale price is available there is no need to resort to any deemed sale price as alleged. In support, the decision in Taloja Steel Ltd. - 2017-TIOL-1614-CESTAT-MUM is cited.

The AR supported the stand taken by the lower authorities.

The Bench, after considering the submissions, observed –

++ In the present case there is no dispute that goods manufactured by the appellant in the capacity of the job worker for their principal M/s. TISCO, the same is sold by the M/s TISCO to the independent customers. The said sale price has been adopted for discharging the excise duty by the appellant.

++ Since in the present case, sale price of the very same goods is available and same has been accepted by appellant for discharging excise duty there is no need to resort to valuation rules under Section 4(1)(b).

Placing reliance on the decisions cited by the appellant, the Bench concluded that the appellant had correctly applied the value on the basis of sale price at which principal had sold the goods.

Setting aside the impugned order, the appeals were allowed.

In passing : See 2008-TIOL-734-CESTAT-MUM .

(See 2017-TIOL-3859-CESTAT-MUM)


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