PREMIER TEXTILE PROCESSORS Vs. COMMISSIONER OF CENTRAL EXCISE,

JUDGEMENT

(1.) The appellants are processors. For each lot of grey fabrics received, they had filed classification lists and price lists. A notice was issued dated 20.9.1990. The notice stated that the assessees had not stated whether the various charges incurred by the time the fabrics came in their hands had been included in the value of the grey fabrics. The query was also made whether inspection and listing charges had been incurred or not. The following observation was also made - "the profit shown is without any basis and you have not furnished any evidence to show that the profit claimed represents the merchant manufactures profit".

(2.) The Assistant Collector finalized the issue. He referred to the Supreme Court's judgment in the case of Ujagar Prints vs. UOI 1989 (32) ELT 493 and made the following observation: -

(3.) The assessees then filed an appeal. The Collector (Appeals) observed that the finding 10% margin was reasonable was itself unreasonable and arbitrary. He directed de novo determination of the manufacturing profit. He did not make any comments as to the startling observations recorded above claimed to have been derived from the Supreme Court's order. In the second round of adjudication the Assistant Collector did not limit himself to the area of remand but reopened the various issues raised in the first communication. He went into the issues of notional interest, shrinkage etc. but justified the additional of 10% margin of profit. Once again the assessees approached the appellate authority. In his lengthy order, the Commissioner (appeals) ultimately upheld the Assistant Commissioner's finding. The ground for this presumption was that the assessees had accepted huge deposits from the suppliers of grey fabrics and in the bargain enjoyed good amount of interest and thus made profits. He considered the other grounds raised by the Assistant Commissioner but dismissed them as of no consequence. This appeal is against this order.