COMMISSIONER OF CENTRAL EXCISE Vs. ANKUR PACKAGING PVT. LTD.
LAWS(CE)-2015-1-146
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on January 08,2015

Appellant
VERSUS
Respondents

JUDGEMENT

RAMESH NAIR, J. - (1.)
(2.)THIS appeal is directed against Order -in -Appeal No. PIII/218/04, dated 21 -11 -2004 passed by the Commissioner (Appeals -III) of Central Excise, Pune, wherein the ld. Commissioner (Appeals) set aside the order -in -original dated 11 -5 -2004 and allowed the appeal of the respondent with consequential relief. The fact of the case is that on the visit by the Central Excise Officers to the respondent factory, it was observed that the value to the extent of scrap generated during the manufacturing process has to be added back to the assessable value the goods manufactured on the job work basis, since sale proceeds of such goods was allowed to be retained by the respondents. It was contention of the department that the value of job work gets reduced to the extent of scrap value allowed to be retained on its sale. Accordingly, the respondent paid the differential duty amounting to Rs. 1,13,759/ - along with the interest of Rs. 30,620/ - without any protest. The respondent later on realized that they were not supposed to pay Excise duty on the value of the scrap, they filed refund claim for the amount of duty and interest paid by them. The refund claim was rejected by the adjudicating authority on the ground that the act of raising an objection by the departmental authorities, payment of duty along with interest by the appellant at the instance of such objection, is complete transaction in itself and cannot be reversed by claiming the refund of the amount so paid. Aggrieved by the said order -in -original, respondent filed appeal before the Commissioner (Appeals) which was allowed vide the impugned order. Hence, the Revenue is before us. Shri V.K. Agarwal, ld. Addl. Commissioner (AR) appearing for the Revenue submits that the respondent paid Excise duty on the objection of the department. When the sale proceeds of the scrap goods generated during the course of job work, retained by the respondent, job worker received an extra consideration over and above the job work charges received by them, therefore the extra consideration would attract Excise duty and accordingly the respondent paid the Excise duty and interest thereupon correctly and legally. Therefore there is no question of refund of the said amount. He submits that as regard the judgment of [ : 2003 (157) E.L.T. 435] Mahindra Ugine Steel Co. Ltd. v. CC Ex. , Pune relied upon by the ld. Commissioner (Appeals), the appeal has been set aside, by the Hon'ble Supreme Court and the matter was remanded to the Tribunal for rehearing. Therefore Mahindra Ugine Steel Co. Ltd. case of this Tribunal does not exist, hence reliance on the same is incorrect. Shri V.K. Agarwal, ld. AR also placed reliance on the case of [ : 2014 (303) E.L.T. 282 (Tri. -Del.)] Mech & Fab Industries v. CC Ex. , Bhopal. He submits that the order passed by the ld. Commissioner (Appeals) suffered by the serious infirmity and the same is not sustainable. On the other hand, Shri. S. Narayanan, ld. Counsel appearing for the respondent submits that valuation of job work was strictly done in accordance with the principle laid down by the Hon'ble Supreme Court in the case of Ujjagar Prints. The value was computed by taking total cost of raw material supplied by principal and job charges actually received from the principal. It is his submission that this method of valuation is correct and legal and therefore no loading over and above this value, on account of sale of scrap can be made. He, referring to Chartered Accountant certificate, submits that the cost of the job work goods was arrived by following the cost accounting principles as required under CAS 4, wherein the realizable value of scrap was reduced. Therefore the value arrived at in respect of job work goods is correct. It is his submission that the sale value of the scrap also suffered the Excise duty therefore the element which has already suffered duty cannot be levied duty twice. He placed reliance on following judgments:
"(a) CCE, Nagpur v. Lloyds Industries Limited [2007 (213) E.L.T. 339 (S.C.)]

(b) CCE v. Cadbury (I) Ltd. [ : 2006 (200) E.L.T. 353 (S.C.)]

(c) CCE, Navi Mumbai v. Amur Bitumen & Allied Products Pvt. Ltd. [2006 (202) E.L.T. 213 (S.C.)]

(d) CCE, Pune v. Tata Engineering and Locomotives Co. Ltd. [ : 2003 (158) E.L.T. 130 (S.C.)]

(e) Birla Corporation Ltd. v. CCE [ : 2005 (186) E.L.T. 266 (S.C.)]"

(3.)WE have carefully considered the submissions made by both the sides and perused the records.
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