TMI Blog1995 (12) TMI 131X X X X Extracts X X X X X X X X Extracts X X X X ..... vancore Titanium Products Ltd. (hereinafter referred to as TTP) for their captive use in the production of Titanium Dioxide. The two important raw materials for the production of Titanium Dioxide were Sulphur and Illmenite. The sulphur was used for the production of Sulphuric Acid which was subsequently used in the process of manufacture of Titanium Dioxide. Sulphuric Acid was classifiable under Item No. l4G of the old Central Excise Tariff and was dutiable on the basis of the value. For arriving at the value of Sulphuric Acid, TTP declared their direct costs and indirect costs. For arriving at the indirect costs, the total cost was divided by them by their normal production capacity and not by the actual production of Sulphuric Acid. The A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sts are concerned, there is no dispute. In so far as indirect costs are concerned, we find that the Revenue has accepted their total costs as declared. To arrive at the cost per tonne, the Revenue has divided these total costs by the actual production of Sulphuric Acid. The normal production capacity has not been reached by TTP. The indirect costs cannot be related to the notional figures which the manufacturer had not reached. The costs have to be spread on the actual production and we do not find any infirmity in the approach of the Revenue. The margin of profit of 10% as indicated in the show cause notice had already been reduced by the original adjudicating authority as 0.1%. 3. Now coming to the question of the cost of steam which is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion." 4. The Revenue had felt aggrieved with the observation of the ld. Collector Central Excise (Appeals) that the cost of production of sulphuric acid must be deducted by a figure representing the value of steam generated as a by-product and this value is to be determined by calculating the actual saving in monetary terms of fuel which the appellants would have used in the absence of steam. The ld. Collector (Appeals) had referred that the steam generated as a by-product was used by TTP captively to heat illmenite. Thus, it is clear that when he was referring to the savings in monetary terms of fuel, he was referring to the heating of illmenite and not to the production of sulphuric acid which in fact had already taken place when the s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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