COMMISSIONER OF CENTRAL EXCISE, COCHIN Vs. KITEX LTD.
SUPREME COURT OF INDIA
COMMISSIONER OF CENTRAL EXCISE, COCHIN
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(1.) The issue involved in the present appeal is whether the impugned goods returned from the premises of job worker after processing under Rule 12B, subjected to further manufacturing process like cutting to short length, stitching ends, ironing, folding and packing resulting in enhancement the value of product, are to be assessed at transaction value (value at which assessee cleared the goods to the customer) or at cost of grey fabric and job charges in terms of judgment in the case of M/s. Ujagar Prints.
(2.) The Tribunal in the impugned judgment has arrived at a finding that after receiving the product from job worker, at whose end excise duty is duly paid, the assessee simply cuts them into Dhotis and, therefore, in terms of Rule 12(B) read with Circular No. 556/53/2000-CX, dated 3-11-2000, it will continue to be classifiable as fabric under Chapter 52/53/55 and such a process undertaken by the appellant does not amount to manufacture. The relevant discussion in this behalf reads as under : -
"Therefore, when the job worker returns the processed goods to the appellants, that amounts to clearance and the duty liability crystallizes at that stage. As per the Board's clarification and the circular issued, the valuation is done on the basis of the principles enunciated in the Ujagar Prints case. That means the value to be adopted for payment of duty is basis of the raw materials cost plus the job charges. After receiving the materials, the appellant simply cuts them and packs them and then thereafter he sells the same. In that process, definitely there is value addition but in terms of Rule 12B and the Board's Circular, the value to be adopted is only the value at the end of the job workers premises. Moreover, the processes undertaken by the appellant do not amount to manufacture. Therefore, we hold that the appellants discharged the duty liability correctly and there is no merit in the demand of the revenue for fixing the duty liability on the sale value of the goods sold by the appellant. That is completely against the provisions of Rule 12B read with Board's Circular. Therefore, the major demand amounting to Rs. 46 lakh cannot be sustained."
(3.) We have gone through Rule 12(B) as well as the Circular relied upon by the Tribunal and find that the said Rule as well as the Circular are rightly interpreted by the Tribunal. We, thus, do not find any merit in this appeal and the same is, accordingly, dismissed.;
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