2004 (97) ECC 273 (SC)

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

Arijit Pasayat and C.K. Thakker, JJ.

Commissioner of Central Excise, Pune

Versus

Kripa Chemicals Pvt. Ltd.

Civil Appeal No. 5000 of 1999

[From the Judgment and Order dated 10.5.99 of the Central Excise Customs and Gold (Control) Appellate Tribunal, Bombay in A.No. E/1719/94-A in F.O. No. C-I/930/WZB/1999]

Decided on 4.11.2004

Valuation (C.Excise)

Excise duty paid on raw material, if modvatted, is not to be included in determining the cost of production of excisable products.

Valuation (C.Excise)

Profit earned by job-worker -- Value of the raw material, the value of the job work done and the manufacturing profit and the expenses for the processing have to be taken into consideration while determining the excisable value.

PRESENT :

S/Shri Mohan Parasaran, Additional Solicitor General, B. Krishna Prasad, Adv. with him for the appellant.

S/Shri C.N. Sree Kumar and Ms. M.L. Shyjatha, Advs. for the respondent.

Cases Cited :

Collector of Central Excise, Pune v. Daiichi Karkaria Limited, 1999 (65) ECC 354 (SC) [Para 1]

Ujagar Prints etc. etc. v. Union of India and Ors., 1989 (21) ECC 11 (SC)............... [Para 1]

ORDER

Arijit Pasayat, J.

Heard.

This appeal involves two issues. One of them relates to the calculation of cost of production and whether excise duty paid on raw material, if modvatted, is to be included in determining the cost of production of excisable products. This issue has been examined by this Court by a three Judge Bench in Collector of Central Excise, Pune v. Daiichi Karkaria Limited, 1999 (65) ECC 354 (SC) : 1999 (112) ELT 353 (SC) and it was held that excise duty paid on raw material, if modvatted, is not to be included in determining the cost of production of excisable products. The other issue raised is the question as to whether profit earned by the job worker is to be included and to what extent? In the clarificatory order passed by this Court in Ujagar Prints etc. etc. v. Union of India and Ors., 1989 (21) ECC 11 (SC) : 1989 (39) ELT 493 (SC), it was explained by way of an illustration that the value of the raw material, the value of the job work done and the manufacturing profit and the expenses for the processing have to be taken into consideration. The determination of the excisable value shall be done on that basis. The appeal is, accordingly, disposed of.

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