# UJAGAR PRINTS ETC. ETC v. UNION OF INDIA & ORS

- **Citation:** [1989] 1 S.C.R. 344
- **Court:** Supreme Court of India
- **Decided:** 1989-01-27
- **Case number:** Civil Miscellaneous Petition H No. 32937of1988
- **Bench:** R.S. Pathak, Sabyasachi Mukharji, S. Natarajan, M.N. Venkatachaliah, S. Ranganathan
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/ujagar-prints-etc-etc-v-union-of-india-ors-10231
- **Pages:** 3

## Headnote

Central Excises and Salt Act, 1944/Central Excise Rules, 1944:
Sections 2(f), 4/Rule 179-Processed fabric-Assessable valueC
Determination of-Judgment of the Court dated November 4, 1988Clarified.
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 processed fabric. [34SD-E]
'
The factory gate means the "deemed" factory gate as if the processed 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 declaration would inclnde only the price or deemed price at which the processed 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, because those would be post-manufacturing profits. [34SG-H; 3468-C]
ORIGINAL JURISDICTION: Civil Miscellaneous Petition
H
No. 32937of1988.
344
)
~-.
lif
)<,
~-
~
"
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 eswaran 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 processor'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 t

## Text

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 valueC
Determination of-Judgment of the Court dated November 4, 1988Clarified.
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 processed fabric. [34SD-E]
'
The factory gate means the "deemed" factory gate as if the processed 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 declaration would inclnde only the price or deemed price at which the processed 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, because those would be post-manufacturing profits. [34SG-H; 3468-C]
ORIGINAL JURISDICTION: Civil Miscellaneous Petition
H
No. 32937of1988.
344
)
~-.
lif
)<,
~-
~
"
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 eswaran 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 processor'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 authorised 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 of the job work
done plus the manufacturing profit and the manufacturing expenses
but not any other subsequent profit or expenses. It is necessarv to
include the processor's expenses, costs and charges plus profit, but it is
not necessary to include the trader's profits who gets the fabrics processed, because those would be post-manufacturing profits.
N.P.V.