i.P.F. Vikram India Ltd. Vs. Commissioner of C. Ex. - Court Judgment

Excerpt:

.....in such cases. for such goods the valuation can be done on the basis of price of comparable goods under rule 6(b)(i) or failing that under rule 6(b)(ii) of the valuation rules, on the basis of the cost of manufacture plus notional profit, in order to arrive at the nearest ascertainable equivalent of the price [stipulated under section 4(1)(a)] as envisaged under section 4(1)(b) of central excise act. this should include the landed cost of the goods received for job work, the processing (job work) charges and the normal profit which the processed goods would have earned if the goods were being sold by the job worker himself at the "place of removal". however, instead of returning the goods to the supplier of goods if the goods are removed/sold by the independent processor itself, then the assessable value will depend upon the sale price at the "place of removal" from where the goods are sold as is the case of other manufacturers.2. in the light of the above, we find that the contention raised by the appellant in this appeal has only to be allowed. the impugned order is set aside and the appeal stands allowed.

Judgment:

1. In the instant case the Commissioner (Appeals) did not accept the contention raised by the appellant that the case is covered by the decision of this Tribunal in the appellants' own case reported in 2001 (127) E.L.T. 116 (Trib.) for the reason that from 28-9-96 there has been amendment to the definition of "place of removal".

Learned Counsel appearing on behalf of the appellant brings to our notice a Circular No. 251/85/96-CX., dated 14-10-96 issued by the Government of India, Ministry of Finance (Department of Revenue) clarifying certain points which had arisen as a result of the amended definition of 'place of removal'. One such point is whether the amendment will have any effect in the matter of valuation of goods manufactured on job work basis. It is clarified that if an independent job worker processes the goods and returns it back to the supplier of goods, the prescription of other 'places of removal' in the Budget will not make any difference in such cases. For such goods the valuation can be done on the basis of price of comparable goods under Rule 6(b)(i) or failing that under Rule 6(b)(ii) of the Valuation Rules, on the basis of the cost of manufacture plus notional profit, in order to arrive at the nearest ascertainable equivalent of the price [stipulated under Section 4(1)(a)] as envisaged under Section 4(1)(b) of Central Excise Act. This should include the landed cost of the goods received for job work, the processing (job work) charges and the normal profit which the processed goods would have earned if the goods were being sold by the job worker himself at the "place of removal". However, instead of returning the goods to the supplier of goods if the goods are removed/sold by the independent processor itself, then the assessable value will depend upon the sale price at the "place of removal" from where the goods are sold as is the case of other manufacturers.

2. In the light of the above, we find that the contention raised by the appellant in this appeal has only to be allowed. The impugned order is set aside and the appeal stands allowed.