ORDER
Gowri Shankar, Member (T)
1. The common question for consideration in these two appeals is the value for assessment of the soap manufactured by Super Soap (Goa) Pvt. Ltd. The appellant entered into a contract with Hindustan Leaver ltd. for converting into cakes of toilet soap the noodles that the company manufactured, and return to it, for which it received agreed remuneration. In the order in appeal E/1661/97, the Commissioner (Appeals) has confirmed the finding of the Assistant Commissioner that the assessable value of the soap would be the price at which Hindustan Lever Ltd. sold it to its dealers. The notice proposed that by application of the judgment of the Supreme Court in Ujagar Prints vs. Union of India 1989 (39) ELT 493, the assessable value should be the price at which Hindustan Lever sold the soap.
2. The Commissioner has based his conclusion on the decision of the Tribunal in Pawan Biscuits Company (Pvt.) Ltd. vs. CCE 1991 (53) ELT 595. In that decision, the Tribunal found that, having regard to the extent of control exercised over Pawan Biscuit Company by Britannia Industries, it was the sale price of the latter that should form the assessable value of the biscuits that Pawan Biscuit Company manufactured. This conclusion is not acceptable for the reason that the notice did not allege that Hindustan Lever Ltd. exercised any control over the manufacturing activities of the appellant; it is not allege that Hindustan Lever Ltd. was in fact the manufacturer. Further, the Supreme Court, in its judgment reported in 2000 (120) ELT 24, allowed the appeal of Pawan Biscuits Company (Pvt.) Ltd. and set aside the order of the Tribunal.
3. The assessable value of the soap would then have to be based on the criteria enunciated in Ujagar Prints Vs. Union of India, i.e., on the cost of raw material, the cost of manufacture and the profit that the appellant would earn on the manufacture.
4. The department had provisionally assessed the soap from 1992 onwards since it was unable to ascertain the price at which Hindustan Lever Ltd. sold the goods. The value taken for provisional assessment was the cost of raw material plus job work charges declared by the appellant, enhanced by 20%. In the order impugned in the other appeal E/161/2001 the Commissioner has finalised the assessment in the absence of the sale price of the Hindustan Lever Ltd. He has ordered the assessment be finalised at the level at which it was provisionally assessed, adding to it the increase in the cost of the soap noodles that had taken place in the meantime. This order finalising the assessment have will have to be set aside in view of our finding that the value must be determined on the basis of the principles laid down in Ujagar Prints. While doing so, the increase in the cost of the soap noodles that the Commissioner has considered must be taken into account; counsel for the appellant does not dispute that there was such increase in that cost.
5. Both appeals are accordingly allowed, and the impugned orders set aside.