Central Excise - Determination of assessable value in the case of goods captively consumed - Addition of profit - Regarding - Central Excise - 8/91-CX.8

Central Excise - Determination of assessable value in the case of goods captively consumed - Addition of profit - Regarding Circular No. 8/91-CX.8 Dated 26-11-1992 [From F. No. 6/38/91-CX-I] Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs, New Delhi Subject : Central Excise - Determination of assessable value in the case of goods captively consumed - Addition of profit - Regarding. I am directed to refer to the letter F. No. V (30) CV/CC/280/91, dated 9th December, 1991 of Collector of Central Excise, Bombay, on the above subject, a copy of which is enclosed herewith. 2. The matter raised by the Collector of Central Excise Bombay has been examined in consultation with the Cost Accounts Branch of the Department of Expenditure, Ministry of Finance. A copy of their opinion in the matter is also enclosed. 3. It has been clarified by the Cost Accounts Branch that interest is a charge for the borrowed funds used and is to be treated like any other item of expense. The expenses incurred on account of interest on loans, depreciation etc. would, therefore, not form a part of the 'profit before tax'. It follows that interest should not be added for arriving at the profit percentage. 4. Although the above stand had already been conveyed by the Ministry in the circular F. No. 6/72/85-CX.1, dated 11-3-1986 , this is being issued to set aside any doubts, which could arise with reference to the earlier instructions vis-a-vis the Cost Audit (Report) Rules, 1968.