G AND Y SOAP WORKS Vs. CCE

JUDGEMENT

(1.) G and Y Soap Works, the appellant, manufactured soap on job work for Wipro Ltd., Aurangabad; the latter supplied to it the raw material required for the manufacture and, in pursuance of an agreement between the two, the appellant converted the raw material into cakes and returned them to Wipro Ltd. In the order impugned in the appeal, the Commissioner has held that the value for assessment of the soap that the appellant manufactured ought to be the price at which Wipro Ltd. sold to its wholesale dealers.

(2.) The notice issued in this regard to the appellant did not specify any particular ground for alleging that the value of the soap should be the wholesale price of Wipro Ltd. In his order, the Commissioner says that the transaction between the appellant and Wipro Ltd. cannot be between principals because there is no sale or purchase of the soap. He finds that the appellant paid duty on the soap as an agent of Wipro Ltd. Since the goods were sold from the depots of Wipro Ltd., to which the appellant transported them, that depot is the place of removal and therefore it is the price prevailing at the place of removal (in accordance with Section 4 of the Act as amended by the Finance (2) Act, 1996) that would apply. He has also quoted from paragraph 37 of the judgment of the Supreme Court in Ujagar Prints v. UOI to the effect that "The value for the assessment under Section 4 of the Act will not be the processing charges alone but in the intrinsic value of the processed fabrics which is the price at which fabrics are sold for the first time in the wholesale market."

(3.) The contention of the counsel for the appellant is that this case is squarely covered by the judgment of the Supreme Court in Ujagar Prints which has been followed in many other decisions. He contends that there is not the slightest allegation in the notice, or finding in the order, that Wipro Ltd. exercised any degree of control over any of the manufacturing activities of the appellant to conclude that it was in fact manufacturer, and contends that there is no reason as to why the Supreme Court's judgment in Ujagar Prints and other judgments relating to valuation of goods by job worker should not apply.