Advance Engineers Vs. Commissioner of Central Excise

1. the appellant was engaged in the manufacture of moulds and dies as a job worker, out of materials supplied by h.r. johnson (india) ltd. in the price list that it filed, it arrived at the assessable value of the goods based on the cost of manufacturer, including the charges that it received for manufacturing the goods. the notice issued to it proposed to add profit obtained from the books of the appellant on the ground that what it received was described in the contract of hr johnson (india) ltd. as "labour charge" therefore did not include profit. in the order impugned in this appeal, the commissioner confirmed the liability to addition of profit to these labour charges.2. the counsel for the appellant contends that the charges that the appellant received would have included an element of profit in addition to the actual expenses incurred by it in the manufacture of these goods. it is unavoidable, he says, it could have carried out the work without incurring any profit at all. he also points out that there is no allegation that the appellant received any other amount from h.r.johnson (india) ltd. 3. the same point was the subject-matter of four decisions of the tribunal, each of them has independently come to the conclusion that the job charges paid to a manufacturer would include an element of profit.4. the emphasise by the commissioner on the contents of the circular of the board does not really help the department's case. the board's circular related to valuation of goods captively consumed, whereas we are concerned with the goods on job work. apart from the fact that the board circular required inclusion of an element of profit in the assessable value, the principle is an exception and by applying that principle, we have concluded that job charges would have included the profit.