Case Law Details
Patel Profiles Pvt Ltd Vs Commissioner of Central Excise (CESTAT Mumbai)
CESTAT Mumbai held that rule 10A of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 [valuation rules] is effected only when inputs are supplied and sale is effected to the buyer by the Principal Manufacturer. Thus, Rule 10A of valuation rules doesn’t come into play for all manner of ‘job-work’.
Facts- The appellant and M/s. Jindal Steel Works Ltd for turnkey execution of a ‘steel rolling mill’ by the former at the facility of the latter and involving two manufacturers of parts/components, viz., M/s. Patel Profiles Pvt Ltd and M/s. Excel Tech Engineers Pvt Ltd, who participated peripherally in the project by arranging for sale of equipment produced by them by deploying goods supplied ‘free of cost’ by the project executor that were then delivered at the site of M/s. Jindal Steel Works Ltd under cover of invoices evidencing payment of appropriate duties of central excise.
As these same equipment also happened to be billed separately by M/s Morgan Construction Co Pvt Ltd to M/s Jindal Steel Works Ltd at prices different from, and higher than, that in the excise invoices of M/s Patel Profiles Pvt Ltd and M/s Excel Tech Engineers Pvt Ltd, jurisdictional central excise authorities objected to the value adopted for computation of duties of central excise by insisting that rule 10A of Central Excise (Determination of Price of Excisable Goods) Rules, 2000 required that the value in the commercial invoices of M/s Morgan Construction Co India Pvt Ltd should instead have been.
Conclusion- Even though rule 10A of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 is intended for ‘job-work’, it does not come into play for all manner of ‘job-work’ but only when ‘inputs’ are supplied and sale is effected to the buyer by the principal manufacturer.
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