INDIAN EXTRUSIONS Vs. COMMISSIONER OF CENTRAL EXCISE, MUMBAI

JUDGEMENT

(1.) THIS appeal and stay application are directed against the order -in -appeal No. SB(23)/23/MV/2011 dated 28 -2 -2011 passed by Commissioner of Central Excise (Appeals), Mumbai. The appellants, M/s. Indian Extrusions, Goregaon, Mumbai, are manufacturer of Plastic bottles/containers falling under Chapter 39 of the First Schedule to Central Excise Tariff Act, 1985. They were manufacturing the said goods from the raw -materials supplied by M/s. Marico Ltd., and after manufacturing they were supplying the goods to M/s. Aero Pharma Pvt. Ltd., Thane for use by the latter for packing hair oil bearing the brand name of Marico Ltd., on payment of excise duty. The appellants were discharging the excise duty on the cost of raw -materials plus job charges. The department was of the view that the assessees were not paying duty on the correct assessable value and the duty should have been paid under Rule 8 of the Central Excise Valuation Rules, 2000 and the value for the purpose of duty should be 110% of the cost of production. Accordingly, a show -cause notice dated 9 -6 -2009 was issued proposing to revise the assessable value under Rule 8 of the Central Excise Valuation Rules and a differential duty of Rs. 3,33,110/ - was demanded on a differential assessable value of Rs. 22,09,577/ - in respect of goods cleared by them during the period from 1 -4 -2007 to 25 -10 -2008. The show -cause notice also proposed to demand interest under Section 11AB and impose penalties under Section 11AC of the Central Excise Act, 1944 and under Rule 25 of the Central Excise Rules, 2002. The case was adjudicated and a duty demand of Rs. 3,33,110/ - was confirmed under the provisions of Section 11A of the Central Excise Act, 1944 along with interest thereon under Section 11AB and a penalty of Rs. 3,33,110/ - was imposed on the appellant under Section 11AC. The appellant preferred an appeal before the Commissioner (Appeals), who vide the impugned order rejected their appeal and, hence, the appellants are before us.

(2.) THE ld. Counsel for the appellant submits that the provisions of Rules 10A and 8 of the Valuation Rules are not attracted in this case as has been held by the lower authorities, as they undertook the job work on a principal to principal basis and in respect of such transactions the assessable value has to be determined on the cost of raw -materials cost plus job charges collected as per the decision of the Hon'ble Apex Court in the case of Ujagar Prints v. UOI, reported in, 1989 (39) E.L.T. 493 (S.C.) and as clarified by Board's Circular No. 619/10/2002 -EX, dated 19 -2 -2002.

(3.) WE have considered the rival submissions.