CHEMDYE MANUFACTURING CO. (P) Vs. CCE

JUDGEMENT

(1.) THIS appeal is directed against the order in appeal No. 5/02 (M -III)(D) dt. 15.7.2002, by which the Ld. Commissioner (Appeals) has allowed the appeal filed by the revenue by setting aside the order in original No. 19/00 dt. 18.8.2000, by which the original authority had dropped the proceedings initiated in the matter against the appellants.

(2.) SHRI M.V. Raman, appearing on behalf of the appellant/assessee, submits that they have been undertaking the job work for M/s. Thirumalai Chemicals Ltd. (M/s. TCL) since 1998 and they had received raw materials from M/s. TCL and processed them into plasticisers and cleared them on payment of duty adopting the sale price of M/s. TCL. He also submitted that for a temporary period of time M/s. TCL had to sell the plasticisers at a price less than the cost price due to adverse marketing condition and accumulation of huge inventories and that such sale at less than the cost price is not barred under Section 4 of the Central Excise Act 1944. Therefore, the question of under valuation does not arise and sought the impugned order to be set aside. In this connection, the Ld. Advocate has referred to the judgement rendered by the Apex Court in the case of CCE, New Delhi v. Gurunanak Refregeration Corporation reported in 2003 (153) ELT 249 (S.C.) : 2003 (108) ECR 13(SC), which was an appeal from order of the Tribunal as . In this case, the Apex Court had held that where normal price within the meaning of Clause (a) of Sub -section (1) of Section 4 of Central Excise Act, 1994 is ascertainable, the provisions of Clause (b) ibid cannot be resorted, to determine the nearest ascertainable equivalent of the normal price of the goods and the Tribunal's order was upheld by the Apex Court. He also submitted that there was no allegation of flow back of money from the buyer to the assessee and in the absence of these factors it cannot be contended that normal price was not ascertainable.

(3.) LD . DR Shri C. Mani, who has submitted para -wise comments filed by the Commissioner of Central Excise vide his letter C.No. V/30/2/81/2002 JC dt. 12.5.2003, the Ld. DR has relied on the Supreme Court judgement rendered in the case of Ujagar Prints v. Union of India reported in 1989 (39) ELT (SC) : 1989 (21) ECR 1 (SC) : ECR C 1347 SC. The value in the case of job work should necessarily include the cost of manufacture and job worker's profit as per the Apex Court's judgement. He also tried to distinguished judgement rendered by the Supreme Court in the case of CCE, New Delhi v. Guru Nanak Refrigeration Corporation. Since in that case, the sale was affected by the manufacturer and not by the job worker. He also relied on the comments submitted by the department vide their letter C.No. V/30/2/81/2002 -JC dt. 12/05/2003.