Posted On by &filed under Judgements.


Customs, Excise and Gold Tribunal – Mumbai
Walchandnagar Industries Ltd. vs Collector Of C. Ex. on 25 September, 2000
Equivalent citations: 2001 (127) ELT 213 Tri Mumbai


ORDER

J.H. Joglekar, Member (T)

1. The appellant manufactured certain goods on job work basis. The price-lists filed by them were approved by the Superintendent on addition of profit margin. Before the Collector (Appeals) the assessees made the claim that the normal profits stood included in the quotation made for job charges and therefore there was no need for addition of any quantum on account of notional profits. The Collector (Appeals) analysed the Supreme Court’s finding in the case of Ujagar Prints v. UO1. He recalled the phrase “manufacturing profits” used by the Supreme Court and felt that a broader meaning should be given to this term. According to him the profit is what the appellant would have earned if they had invested their own money for purchase of raw materials for consequent manufacture. The total expenditure minus the price at which they would have sold the product would amount to that profit which would satisfy the requirement of the phrase used by the Supreme Court. To determine this he sent the issue back to the Assistant Collector. Hence the appeal.

2. The issue as to a computation of the notional profit has still not been decided. The term “profit” is capable of various interpretations. It could relate to gross profit or net profit or in the extreme to net profit after appropriations. Similarly a profit may be of an entire group, of a company, of a licensee unit or of a division thereof. In fact the provisions of rule 6(b)(ii) is made in a peculiar manner making a parameter of an anticipated future sale. In the preing it extremely difficult to make an accurate estimation of the margin of profit.

3. But the basic claim of the assessee that the quotation of job charges was made after taking into account the profit margin has neither been considered nor negated. In the Tribunal judgment in the case of Jyoti Structures Ltd. v. CCE – 1999 (106) E.L.T. 402 it was held that this statement has to be accepted unless the department can disprove it. In the circumstances this judgment covers the case completely. The Collector (Appeals)’s order is set aside. The appeal is allowed.


Leave a Reply

Your email address will not be published. Required fields are marked *

* Copy This Password *

* Type Or Paste Password Here *

107 queries in 0.182 seconds.