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2023 (10) TMI 315 - CESTAT KOLKATAMethod of Valuation of goods for finalization of the provisional assessments - cigarettes and Packaging Materials cleared for captive consumption - Revenue's contention is that while computing the cost of production it is not correct to exclude the unabsorbed overheads. HELD THAT:- It is observed that whether unabsorbed overheads are includable in the cost of production or not is a legal principle that is to be decided by an expert. In this case, for the purpose of arriving at the cost of production, Cost Audit under Section 14 A of the Central Excise Act, 1944 by an independent Cost Accountant was ordered by the Chief Commissioner. In addition to this, the Chief Commissioner, Central Excise, Ranchi Zone, Patna has also constituted a special team to finalize the provisional assessment. On 14.11.07, the special team submitted their report. Though they were not professionally qualified to study the issue and submit a report, a sincere effort has been made to adopt the broad principles of CAS-4 to arrive at the cost of production. It was also observed by the special team that the cost incurred against the expenditure under “unabsorbed overheads” has not been considered while calculating the cost of production. It is observed that when the Special team submitted their report and made an observation regarding non-inclusion of certain elements in cost of production as per CAS-4 principles, the Appellant submitted the clarifications/explanation wherein they categorically stated that the cost of production has been arrived at as per the principles adopted in CAS- 4 - There is nothing on record to Show that there were any deficiencies in the Report of the Special Audit Team. Neither the Authority who constituted the Special Audit Team nor the Reviewing Commissioner has expressed any lacunae in the Report. The Lower authority has gone by the Report and finalized the pending Provisional Assessments - the Deputy Commissioner has finalized the provisional assessments by adopting the principles of CAS-4 to arrive at the cost of production and the assessable value for the purpose of payment of duty has been correctly determined in the Order-in-Original dated 12.12.2007. The method of valuation adopted by the adjudicating authority is as per the principles enshrined in CAS-4 and it does not warrant any intervention - Matter remanded for fresh adjudication for determining the valuation issue afresh - appeal allowed by way of remand.
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