Collector of Central Excise Vs. Standard Metal Works

Collector of Central Excise vs Standard Metal Works

Type Court Judgment Court Customs Excise and Service Tax Appellate Tribunal CESTAT Delhi Decided Nov 05, 1997

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Citation: sooperkanoon.com/12066
Court: Customs Excise and Service Tax Appellate Tribunal CESTAT Delhi
Decided On: Nov 05, 1997
Subject: Labour and Industrial

Case Summary

AI-generated summary - not the official court judgment text.

Labour and Industrial

Key legal issue: Labour and Industrial

Parties & Advocates

Appellant / Petitioner

Collector of Central Excise

Respondent

Standard Metal Works

Legal References

Reported In: (1998)(98)ELT447TriDel

Excerpt

.....labour charges and 10% margin of profit. assistant collector issued a letter to the respondent directing addition of cost of packing and 3% melting loss to the assessable value. treating this letter as an order, the job worker filed appeal before the collector (appeals) who held that there was no justification to add these two elements as also the margin of profit. this order is now challenged by the department.4. from the use of the words "labour charges", shri sanjeev srivastava, jdr contended that respondent is not an independent job worker but only a hired labour. if that be so, respondent would not be the manufacturer and would not be required to file price list or pay excise duty. the department has accepted the respondent to be a job worker. that being so, principles laid down by the supreme court in ujagar prints case 1988 (38) e.l.t. 535 and the ujagar prints clarificatory order 1989 (39) e.l.t. 493 would apply and the assessable value would be the sum total of cost of raw materials and processing charges which would necessarily include the margin of profit of the job worker. it is, no doubt, true, as point out, that respondent declared in the price list 10% margin of profit apart from labour charges. respondent did so as required by the assistant collector as seen in the order passed by the collector (appeals). assistant collector gave such an indication in response to a letter sent by the respondent seeking clarification. in the circumstances, "labour charges" must be regarded as the job charges. that being so, the question of addition of further margin of profit would not arise.

Full Judgment

1. The department has filed this appeal challenging the order dated 22-6-1990 passed by the Collector (Appeals), Bombay setting aside the order dated 10-7-1989 passed by the Assistant Collector of Central Excise, Bombay.

2. Respondent has sent a request for adjournment of the case. Having perused the record we are of the opinion that appeal could be disposed of even without hearing the respondent. We have heard Shri Sanjeev Srivastava, J DR.3. Respondent was receiving raw materials from suppliers and returning the same after processing to the suppliers. Price list was filed showing the assessable value as the sum total of cost of raw materials, labour charges and 10% margin of profit. Assistant Collector issued a letter to the respondent directing addition of cost of packing and 3% melting loss to the assessable value. Treating this letter as an order, the job worker filed appeal before the Collector (Appeals) who held that there was no justification to add these two elements as also the margin of profit. This order is now challenged by the department.

4. From the use of the words "labour charges", Shri Sanjeev Srivastava, JDR contended that respondent is not an independent job worker but only a hired labour. If that be so, respondent would not be the manufacturer and would not be required to file price list or pay excise duty. The department has accepted the respondent to be a job worker. That being so, principles laid down by the Supreme Court in Ujagar Prints case 1988 (38) E.L.T. 535 and the Ujagar Prints clarificatory order 1989 (39) E.L.T. 493 would apply and the assessable value would be the sum total of cost of raw materials and processing charges which would necessarily include the margin of profit of the job worker. It is, no doubt, true, as point out, that respondent declared in the price list 10% margin of profit apart from labour charges. Respondent did so as required by the Assistant Collector as seen in the order passed by the Collector (Appeals). Assistant Collector gave such an indication in response to a letter sent by the respondent seeking clarification. In the circumstances, "labour charges" must be regarded as the job charges. That being so, the question of addition of further margin of profit would not arise.

Same Court & Year Customs Excise and Service Tax Appellate Tribunal CESTAT Delh... Same Parties Collector of Central Excise vs Standard Metal Works Same Subject Labour and Industrial