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2012 (7) TMI 55 - CESTAT, MUMBAICaptive consumption - Valuation of wire rods manufactured and supplied to sister units - Revenue contended difference between the cost of conversion adopted in respect of interplant transfer to sister units and the conversion cost actually charged from unrelated party (TISCO Jamshedpur) - Held that:- On perusal of debit notes and invoices it is found that appellants have shown the amount as conversion charges and not the conversion cost and it is the stand of the appellant that the conversion charges are inclusive of conversion cost + profit element. This explanation given by the appellants is reasonable and needs acceptance. Since for the purpose of valuation under rule 8 of the Central excise Valuation Rules, the cost of production is required to be taken, this cost of production cannot be equated to the conversion charges charged by the appellants in respect of goods supplied to TISCO. Accordingly, conversion charges shown in debit note/invoices issued to TISCO cannot be taken as a conversion cost and taken as a basis for the purpose of assessments of wire rods cleared to sister units - Decided against the Revenue.
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