1. This appeal is filed by the Revenue against the Order-in-Original No. 08/2008-CE-Commr., dated 31.03.2008.
2. The respondent is absent despite notice. It is seen from the records that the matter has been coming up for disposal regularly and respondent remained unrepresented.
3. Since the matter is of 2009, we take up the appeal for disposal. Heard the Learned Commissioner and perused the records.
4. On perusal of records, it transpires that the issue involved in this case is regarding the valuation of P or P Medicaments cleared during the period July, 2002 to March, 2005.
5. It is the case of the Revenue in the show cause notice that the respondent herein under an agreement with M/s. Parke Davis (I) Ltd. [PD] had manufactured various P or P Medicaments and cleared the same discharging Central Excise Duty as per the agreement value between them but they are supposed to discharge the Central Excise duty on the value at which M/s. PD sells the said Medicaments in the market; it is also the case of the Revenue in the show cause notice that the valuation is incorrect as the value of free supply of machinery, raw material and packing material is not considered. The respondent contested the show cause notice on merits. The adjudicating authority after following due process of law, after considering all the issues raised in the show cause notice, by the impugned order dropped the proceedings initiated by the show cause notice. Revenue is aggrieved by such order.
6. Learned Commissioner submits that the adjudicating authority erred in holding that the respondent is a job worker and provisions of Rule 11 r/w Rule 6 of Valuation Rules are applicable, following the judgment of Hon'ble Supreme Court in the case of Ujagar Prints and Pawan Biscuits. It is her submission that the respondent herein himself has contended that he is not a job worker. It is her submission that differential duty on the Medicaments is correctly demanded by adopting assessable value of PD and while arriving at the valuation, additional consideration in form of free supply of raw-material, machinery, knowhow, labels, cost of designs, cartons and foils received from PD was not included as per the statement of MD of the respondent. It is her submission that cost of these free supplies needs to be included.
7. On careful consideration of the submissions made, we find from the records that the statements of responsible personnel of the respondent herein categorically indicate that they had purchased the plant and machinery, raw-material and packing material. The cost of the machinery is based upon the written down value and the cost of raw-materials as evaluated at the time of supply. The consideration for cost of raw-material, packing material and the plant and machinery are in fact adjusted by raising debit notes. We find that the adjudicating authority in para 31 has recorded the following:
"31. Further, Statements of Sri Sunil S. Ghogre, Director (Operations) of M/s. PD, Dr. U. Ravi Rao, MD of M/s. GLL and Sri B.K. Anderson, Director of M/s. Pfizer Ltd. were recorded wherein they have categorically stated that the transactions between M/s. PD and M/s. GLL are on principal to principal basis. Dr U. Ravi Rao in his statement dated 30.08.2002, informed that the cost of the Plant & Machinery, raw material and packing material has not been worked out by M/s. PD at the time of transfer, but they have to pay the sale price for those goods. Subsequently, M/s. GLL have submitted Debit notes raised by M/s. PD, abstracts of ledgers, Chartered Engineer's certificate evidencing payment of the cost of the materials transferred by M/s. PD to M/s. GLL, to the investigating officers evidencing the fact that the said goods are not supplied free of cost. As per the documents, M/s. GLL paid M/s. PD Rs. 2,45,91,621/- towards supply of raw materials, packing materials and Rs. 1,03,93,429/- (including central excise duty of Rs. 19,93,682/-) for the plant and machinery transferred. As seen from the Central Excise invoice, M/s. PD adopted more value for the machinery, when compared to the depreciated value of Rs. 1,03,93,429/- actually paid by M/s. GLL. From the documentary evidence it is evident that M/s. GLL have purchased the machinery, raw material & packing material and as such there was no free supply of the goods from M/s. PD."
8. It is the contention of the Learned Commissioner (AR) that the debit notes have been raised subsequently on the investigation being carried out by the department; hence, it is an afterthought. It is specifically recorded by the adjudicating authority that the genuineness of the transaction between the respondent and the said PD is not doubted in as much there is no allegation in the show cause notice that debit notes were fake and the show cause notice has not challenged the said debit notes, a finding not effectively countered by Revenue in appeal.
9. In our considered view, the adjudicating authority was correct in relying upon the agreement executed by the re
Please Login To View The Full Judgment!
spondent (PD) for manufacturing of P or P Medicaments on principal to principal basis, in discharging the Central Excise duty on the value which is arrived based upon cost of production (+) profit margin as is decided by the Apex Court in the case of Pawan Biscuits : 1991 (53) ELT 595 (Tribunal)]. 10. We do not find any reason to interfere in the findings in Order-in-Original, which are a well reasoned one. We hold that the impugned order is correct and legal and does not suffer from any infirmity. The impugned order is upheld and the appeal is rejected.