Full Judgment
2. A number of show cause notices were issued to the appellants seeking to include the following further costs in the assessable value declared by the appellants in the PLs :-(a) Octroi - 3%(b) Wastage - 2%(c) Trader's profit - 11%(d) Insurance - 1%.
3. During the adjudication proceedings, the ld. Assistant Commissioner accepted the submissions of the Appellants that octroi only on soap noodles supplied by Wipro is includible (as rest of the items were supplied locally from Mumbai itself and no octroi is paid on them), and since the goods are not insured no cost was incurred on insurance.
Accordingly, the demands on both these accounts were dropped.
4. As regards wastage and trader's profit, the appellants submitted that :- (a) the wastage to the extent permissible by Wipro has already been included in the cost calculations given by them and the CA's Certificate clearly shows that such costs have been included; (b) trader's profit is not includible in the assessable value in terms of the judgment of the Hon'ble Supreme Court in the case of Ujagar Prints.
5. As regards the wastage, the appellant's contention is that the same is included in the working of the cost of soap. The Assistant Commissioner has enhanced the same without giving any reason. It is not the department's case that the appellants are incurred higher percentage of wastage than allowed by Wipro Ltd. In these circumstances, the Assistant Commissioner was not justified in enhancing the wastage.
6. As regards the trader's profit, the appellant's contention is that the same is not to be added as clarified by the Hon'ble Supreme Court in the case of Ujagar Prints. It has also been contended before us that the Commissioner (Appeals) disposed off the appeal on altogether different ground than what was raised in the Order-in-Original.
7. We find force in the above contention of the ld. Advocate. Trader's profit is definitely not required to be added being a post-manufacturing profit as held by the Hon'ble Supreme Court in the case of Ujagar Prints reported in 1989 (39) E.L.T. 493 (S.C.).
Similarly, there was no justification for adding more wastage than what was allowed by the principal manufacturer Wipro Ltd. No valid reasoning has been given by the Assistant Commissioner for enhancing the wastage percentage.
8. In view of our foregoing observation, we set aside the impugned order and remand the matter to the Assistant Commissioner for arriving at the correct assessable value in the light of the observation made by us. The appeal is disposed off in above terms.