UJAGAR PRINTS ETC. ETC. versus UNION OF INDIA & ORS.

Citation: [1989] 1 S.C.R. 344 · Decided: 27-01-1989 · Supreme Court of India · Bench: R.S. PATHAK, SABYASACHI MUKHERJI, S. NATARAJAN, M.N. VENKATACHALIAH, S. RANGANATHAN · Disposal: Disposed off

Cited by 4 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
B 
UJAGAR PRINTS ETC. ETC. 
v. 
UNION OF INDIA & ORS. 
JANUARY 27, 1989 
[R.S. PATHAK, CJ, SABYASACHI MUKHARJI, 
S. NATARAJAN, M.N. VENKATACHALIAH AND 
S. RANGANATHAN, JJ.] 
Central Excises and Salt Act, 1944/Central Excise Rules, 1944: 
Sections 2(f), 4/Rule 179-Processed fabric-Assessable value-
C 
Determination of-Judgment of the Court dated November 4, 1988-
Clarified. 
D 
E 
F 
G 
On a civil miscellaneous petition for clarification of this Conrt's 
jndgment dated 4th November, 1988, the Court. 
HELD: The assessable value of the processed fabric would be the 
value oftbe grey-cloth in the hands ortbe processor plus the value of the 
job-work done plus manufacturing profit and manufacturing expenses 
whatever these may be, which will either be included in the price at the 
factory gate or deemed to be the price at the factory gate for the proces-
sed fabric. [34SD-E] 
' 
The factory gate means the "deemed" factory gate as if the pro-
cessed fabric was sold by the processor. [345E] 
If the trader, who entrusts cotton or man-made fabric to the 
processor for processing on job-work basis, would give a declaration to 
the processor as to what would be the price at which he would be selling 
the processed goods in the market, that would be taken by the Excise 
authorities as the assessable-value of the processed fabric and excise 
duty would be charged to the processor on that basis. Such a declara-
tion would inclnde only the price or deemed price at which the proces-
sed fabric wonld leave the processor's factory plus his profit. It is 
necessary to include the processor's expenses, costs and charges plus 
profit, but not the trader's profits who gets the fabrics processed, be-
cause those would be post-manufacturing profits. [34SG-H; 3468-C] 
ORIGINAL JURISDICTION: Civil Miscellaneous Petition 
H 
No. 32937of1988. 
344 
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" 
UJAGAR PRINTS v. U.0.1. 
34·5 
IN 
A 
Writ Petition No. 12183 of 1985. 
(Under Article 32 of the Constitution of India). 
K.K. Venugopal, Mrs. Jayashree Wad and Mrs. Aruna Mathur 
B 
for the Petitioners. 
K. Parasaran, Attorney General, A.K. Ganguli, P. Parm es-
waran and K. Swamy for the Respondents. 
The following Order of the Court was delivered: 
c 
ORDER 
In respect of the civil miscellaneous petition for clarification of 
this Court's judgment dated 4th November, 1988, it is made clear that 
the assessable value of the processed fabric would be the value of the 
D 
grey-cloth in the hands of the processor plus the value of the job-work 
done plus manufacturing profit and manufacturing expenses whatever 
these may be, which will either be included in the price at the factory 
gate or deemed to be the price at the factory gate for the processed 
fabric. The factory gate here means the "deemed" factory gate as if 
the processed fabric was sold by the processor. In order to explain the 
E 
posiiion it is made clear by the following illustration: if the value of the 
grercloth in the hands of the processor is Rs.20 and the value of the 
job-work done is Rs.5 and the manufacturing profit and expenses for 
the processing be Rs.5, then in such a case the value would be Rs.30, 
being the value of the grey-cloth plus the value of the job-work done 
plus manufacturing profit and expenses. That would be the correct 
F 
assessable-value. 
If the trader, who entrusts cotton or man-made fabric to the 
processor for processing on job-work basis, would give a declaration to 
the processor as to what would be the price at which he would be 
selling the processed goods in the market, that would be taken by the 
G 
Excise authorities as the assessable-value of the processed fabric and 
excise duty would be charged to the processor on that basis provided 
that the declaration as to the price at which he would be selling the 
processed goods in the market, would illclude only the price or 
deemed price at which the processed fabric would leave the proces-
sor's factory plus his profit. Rule 174 of the Central Excise Rules, 1944 
H 
A 
B 
c 
346 
SUPREME COURT REPORTS 
I 1989) 1 S.C.R. 
en joins that when goods owned by one person are manufactured by 
another the information is required relating to the price at which the 
said manufacturer is selling the said goods and the person so autho-
rised agrees to discharge all the liabilities under the said Act and the 
rules made thereunder. The price at which he is selling the goods must 
be the value of the grey-cloth or fabric plus the value 

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