9911796707
TMI Blog2009 (4) TMI 631X X X X Extracts X X X X X X X X Extracts X X X X ..... he value of the castings so cleared by cost construction method in terms of Rule 6(b)(ii) of the Central Excise Valuation Rules, 1975 (CVR). On scrutiny of the records of the appellants it was tentatively found by the authorities that for clearance of unmachined castings during September 1996 to February 1997 the appellants had not determined the value correctly and had followed a wrong method. A Show Cause Notice was issued on 3-4-1997 proposing to determine the value in accordance with the provisions of Rule 6(b)(ii) of the CVR and to recover an amount of Rs. 17,14,866/- which appeared to have been short-paid by the appellants. 2. Adjudicating the above Show Cause Notice the original authority found that the only dispute regarding t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sp; Value Weight (a) (b) 1 Cost of raw materials 10,000/- 1000 Kgs. 2 Cost of other raw materials/additives 5,000/- 200 Kgs. 3 Production expenditure (like wages, power, wear and tear, profit margin etc.) 1,000/- 4 Final product (i.e. good castings)*** ? 800 Kgs Value = 1(a)+2(a)+3(a) 10,000+5,000+1,000 = Rs. 13.30 per Kgs. *** The assessee has included all the goods which is produced and not merely what is cleared by them to the sister concern to arrive at the unit cost. The Commissioner (Appeals) found the method canvassed by the department to be legally correct. He upheld the order of the original authority. In the appeal before us the impugned order is assailed on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R. The said rule provides that value of goods captively consumed can be determined based on the cost of production of such goods including profits, if any, the assessee would have normally earned on the sale of such goods. The ld. Counsel for the appellants argued that the cost of production of the castings has to be determined by working out the cost per unit of raw material from the total quantity of raw material consumed. He also argued that CAS-4 should be adopted to work out such cost of production. We find that the first argument was rightly rejected by the original authority. As for CAS-4, this accounting principle came to be adopted after the said order was passed and was not canvassed. (The Central Board of Excise and Customs vide ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
