ORDER
G.A. Brahma Deva, Member, J.
1. These are two appeals filed by the appellants with reference to the respective impugned orders involving a common issue and therefore they are taken together and are being disposed off by this common order.
2. The appellants M/s. Loharu Steel Industries Ltd. are engaged in the manufacture of steel products falling under sub-heading No. 7214.90 and 7216.90 of Central Excise Tariff. They manufacture the said goods on their own account and also on job work basis. The assessee sell the goods manufactured by them at their factory gate and also manufacture the goods on job work basis and clear them to the suppliers of raw materials. The dispute is with reference to the determination of value of goods manufactured on job work basis. In the present case, M/s. Vishakapatnam Steel Plant (VSP) supplied the goods, the raw materials, to the assessee. The goods are manufactured by the assessee on job work basis. It is alleged in the show cause notice that the assessees have not determined the value of the goods on the basis of normal price applied to such goods manufactured and sold by them at their factory gate. It is also proposed in the show cause notice that the highest selling price adopted by the assessee in the case of goods sold by them at their factory gate as the normal price for the goods in determining the value of the goods manufactured and cleared on job work basis. Show cause notice was duly answered by the assessee stating that they adopted the selling price of M/s. Vishakapatnam Steel Plant, the supplier of raw materials, as the normal price for the goods. Adjudicating authority has adopted the ex-factory wholesale price of the appellant manufactured on own account as basis in determining the value of goods manufactured on job work basis also. The appellants have become unsuccessful before the first appellate authority on this issue. Hence, these two appeals.
3. Arguing for the assessee Shri A.S. Monappa, submitted that the Assistant Commissioner at the first instance has demanded the differential duty holding that highest price charged for the goods sold by the appellant for their own goods through consignment agents should be adopted as assessable value for the goods manufactured on job work basis whereas the Commissioner (Appeals) has vide impugned order held that the ex-factory price charged by the appellant for the sale of their own goods should be adopted as assessable value for the goods manufactured on job work basis. He submitted that it was the contention of the party from the beginning that the selling price declared by the raw material supplier namely M/s. Vishakapatnam Steel Plant should be adopted as the assessable value in respect of the goods manufactured on job work basis, in view of the ruling of the Supreme Court in the case of Ujagar Prints reported in 1989 (39) E.L.T. 493 (S.C.). He submitted that the Tribunal has been consistently taking this view following the rulings given by the Apex Court as can be seen in the case of Sangam Processors (Bhilwara) Ltd. v. CCE, Jaipur [2000 (122) E.L.T. 45] as well as in the case of Shako Textiles and Ors. v. CCE, Jaipur [2001 (134) E.L.T. 513 (T) = 2001 (47) RLT 280]. In the case of Sangam Processors, it was held that when the trader gives value as a selling price of the processed fabric that price given by the trader must be accepted by the job worker for the purpose of payment of duty. The Excise authorities cannot go beyond that declared value since the practice resorted to, by the job worker in this case is found to be in strict compliance with the principles stated by the Supreme Court, there is no ground to fault that practice.
4. In the case of Shaloo Textiles, it was held that there is no justification on the part pf authorities to demand duty on the basis of the sale price of either Shaloo Textiles or Banswara Syntex Ltd. Whether Shaloo Textiles is a dummy or whether the sale transactions between Shaloo Textiles and Banswara Syntex Ltd. are bona fide or not are irrelevant for computing the assess-able value of the processed fabric. In other words, assessable value of processed fabrics is to be determined in terms of Supreme Court judgment, in Ujagar Prints and not on the basis of sale price of processed fabrics of the supplier of grey fabrics irrespective of the fact whether grey fabrics supplier is a dummy unit or the transactions are not bona fide.
5. Smt. Radha Arun, learned DR appearing for the Revenue submitted that issue pertains to valuation of goods produced on job work basis when identical goods are produced and sold on the manufacturers’ own account. She said that when ex-factory wholesale price is available, that should be adopted for all clearances of identical-goods manufactured by the appellant in their factory either on job work basis or otherwise. She said that case law was developed with reference to the applicability or otherwise of Rule 6B of Central Excise Valuation Rules, but not on the point at issue. She referred to the decision of the Tribunal in the case of Agarwal Steel Complex reported in 2001 (128) E.L.T. 505 and Kandivli Metal Works reported in 1997 (90) E.L.T. 187 wherein it was held that Rule 6B applies only in one situation when the goods are captively consumed and not applicable in cases of job work. She pointed out that case law referred to by the other side is applicable in determining the value of goods produced on job work basis, when no identical goods are produced by the assessee. She also said that ratio of the decision of the Supreme Court in the case of Ujagar Prints (supra) is not applicable to the facts of this case, since no goods were produced on own account by the assessee in that case.
6. We have carefully considered the matter. Whether the adoption of the ex-factory wholesale price at which the goods were cleared by the appellant on their own account should be the basis in determining the value of the goods manufactured on job work basis is an issue to be considered herein. In the instant case, the party has adopted the selling price of M/s. Vishakapatnam Steel Plant, the supplier of raw material as the normal price for such goods (goods manufactured on job work basis). In terms of Section 4 of the Central Excise Act, the value for the purpose of duty shall be deemed to be the normal price i.e. the price at which such goods are ordinarily sold by the assessee to a buyer in the course of wholesale trade for delivery at the time and place of removal. If the goods are manufactured on job work basis, the Supreme Court has clearly held in the case of Ujagar Prints while treating the job worker as the manufacturer and in imposing the duty it is necessary to include the processor’s expenses, cost and charges plus profit but it is not necessary to include the trader’s profit since that profit being a post manufacturing profit. In other words, trader’s selling price minus his profit would be the value of the goods manufactured in the hands of job worker to attract duty. In the instant case, the assessees have paid duty on the selling price of M/s. Vishakapatnam Steel Plant which includes trader’s profit margin as well. As such, though in terms of the Apex Court’s judgment, the profit margin of Vishakapatnam Steel Plant need not be included in the value of the goods, the assessees have included it and have paid duty thereon. In view of this position there was no cause to raise further demand. It has also been settled by various High Courts starting from Madras High Court in the case of Lucas T.V.S. Ltd. v. Assistant Collector of Central Excise, Madras and Ors. [1981 (8) E.L.T. 657] that there can be any number of prices at which the same goods can be sold on the same day and all these prices shall be the normal prices for the said goods. Hence, price at which the goods are manufactured on own account cannot be said to be a normal price with reference to the goods manufactured on job work basis. Price of the goods may vary depending upon various considerations and difference in the quality, quantity and cost of the raw materials used therein. The Department also has not come out with evidence to substantiate the claim that the goods manufactured on own account are similar to the goods manufactured on job work basis in all respects. In our view, irrespective of the fact that goods are manufactured on own account, the value with reference to the goods manufactured on job work basis should be determined as per the ruling given by the Supreme Court in the case of Ujagar Prints. It cannot be said that ruling applies to the situation where goods are manufactured only on job work basis and not otherwise. Since the assessee has adopted the trader’s price with reference to the goods manufactured on job work, the price given by the trader must be accepted for the purpose of payment of duty. We find that the practice resorted to by the job worker in the instant case is found to be in strict compliance with the principles of the law stated by the Supreme Court in the case of Ujagar Prints and accordingly there was no justification to raise the demand in
respect of goods manufactured on job work basis. Appeals are allowed ac
cordingly.