ORDER
K.K. Usha, President
1. This appeal at the instance of the assessee is against the order passed by the Commissioner of Central Excise (Appeals), New Delhi dated 8-10-2001. Under the above order the Commissioner (Appeals) has rejected the contentions raised by the appellant that the assessment has to be made on the basis of the ratio of the decision of the Supreme Court in Ujagar Prints-1988 (38) E.L.T. 535. The Commissioner on recalculation of the duty confirmed the demand to the extent of Rs. 3,23,494/- and set aside the imposition of penalty. In this appeal the appellant challenges the demand of duty raised against it without following the decision of the Ujagar Prints.
2. The appellants are engaged in the manufacture of paints falling under Chapter 32 of the Central Excise Tariff Act, 1985. They have two units. In Unit No. 1 they manufacture goods on its own behalf by procuring raw material from open market. These goods are sold to their own customers including M/s. Rajdoot Paints Ltd. In Unit No. 2 they manufacture the very same paints on job work basis and under contract with M/s. Rajdoot Paints Ltd., who make available the raw materials required. The appellants were paying duty in respect of the products manufactured in Unit No. 2 following the principles in Ujagar Prints case. They arrived at the assessable value by adding the value of raw material cost and packing charges/cost with job work charges. The amount of job work charge included the margin of profit of the appellants also. Show cause notice was issued by the Department that the assessable value in respect of goods cleared from Unit No. 2 is low as compared to the assessable value of the same product manufactured by the appellant in their Unit No. 1. Appellant in reply to the show cause notice pointed out that the principle that has to be followed is the dictum in Ujagar Prints case in the matter of product manufactured on job work basis in Unit No. 2. They placed reliance on Kandivali Metal Works v. CCE, Bombay – 1997 (90) E.L.T. 187 (T) = 1997 (18) RLT 297 and J.R. Fabricators Pvt. Ltd, v. CCE, Madras -1997 (20) RLT 726.
3. The Assistant Commissioner rejected the contentions raised by the appellant and confirmed the demand of Rs. 9,57,082/- and imposed a penalty of Rs. One Lakh. Four show cause notices were adjudicated together and a common order was passed. Before the Commissioner (Appeals) the appellants pointed out that job work charges of Rs. 3.40 per litre claimed by the appellant included expense of Rs. 2.20 and profit of Rs. 1.20 per litre. The above would show that the appellants were earning a profit of 36% for undertaking job work. It is also pointed out that for Unit No. 1 where the appellant had to make investment on raw material and other elements, the profit earned came to only about 9%. The price of the goods manufactured at Unit No. 1 had to be higher than the goods manufactured at Unit No. 2 in view of the fact that the appellant had to make much more investment in Unit No. 1. It was also contended by the appellant that so long as they are following the procedure laid down in Ujagar Prints case the Department cannot take recourse to the provisions contained under Rule 6(a) of the Valuation Rules. In support of the above contention they relied on Kandivali Metal Works v. CCE, Bombay [1997 (90) E.L.T. 187 (T) = 1997 (18) RLT 297] and J.R. Fabricators Pvt Ltd. v. CCE, Madras – 1997 (20) RLT 726.
4. Before us the Learned Departmental Representative could not raise any contention to the effect that the dictum in Kandivali Metal Works and J.R. Fabricators are not applicable to the appellants case but the contention was that the value of the brand name was not included in the assessable value as is seen worked out in the certificate issued by the Chartered Accountant. We are not able to accept this contention which is taken for the first time before this Tribunal. The question of inclusion of the value of brand name in the assessable value was never raised in the show cause notice. Under these circumstances the Revenue cannot be permitted to put forward such a contention at this stage.
5. We find that the appellant is fully justified in contending that so long as they are applying the ratio of Ujagar Prints case in the matter of arriving at the assessable value, the Department cannot reject the same for the reason that the assessable value on the very same goods in Unit No. 1 where the manufacturing process is to be done directly by the assessee is higher.
6. In the result, we set aside the impugned order and allow the appeal.