- (1.) THESE appeals are filed against the judgment of the Customs, Excise and Gold (Control) Appellate Tribunal (in short "Cegat"), New Delhi dtd. 21/1/1999.
(2.) THE brief facts are that the appellants manufacture, on behalf of the Railways, points and crossings. The points and crossings are manufactured on job-work basis. The raw material is supplied by the Railways. After manufacture the points and crossings are handed over to the Railways. In the process of manufacturing points and crossings waste/scrap to the extent of 5% arises. The waste/scrap is not returned to the Railways but is sold off by the appellants. The question for consideration is whether in computing the value of the points and crossings, the value of the scrap has got to be added. This Court has in Ujagar Prints Vs. Union of India held that in respect of goods produced on job-work basis the assessable value would include the cost of material, processing charges and profit of the processor. Thus value has to be worked out by taking into account the cost of raw material, labour charges and any other profits earned by the processor.
(3.) IT is an admitted position that to manufacture 100 kg of points and crossings, 105 kg of raw material has to be used. Therefore, in working out the value of points and crossings the cost of 105 kg of raw material would have to be taken into account. Undoubtedly, when points and crossings are manufactured a small quantity of raw material becomes scrap/waste. But that does not detract from the fact that to manufacture 100 kg of points and crossings 105 kg of raw material has to be used. This element i.e. the cost of raw material would remain the same irrespective of whether scrap/waste is returned to the Railways or kept by the appellants.;