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TMI Blog2011 (2) TMI 1050X X X X Extracts X X X X X X X X Extracts X X X X ..... and consumed the same in the manufacture of formulations at their sister units located elsewhere in the country. Since the goods were captively consumed, the respondent was valuing the said goods based upon the cost of production plus profit. The disputed period in this case is January 2001 to December 2001, wherein the respondent while arriving at assessable value of the intermediary product consumed by them, determined the cost of the product and submitted a Chartered Accountant's certificate. It is the case of the Revenue that the advertising cost, interest, marketing distribution expenses and other administrative expenses are required to be included in the cost of the production of the said intermediary product. Coming to such co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of captively consumed goods effected after 13.2.2003 will have to be done in accordance with CAS-4 whereas in the instant case the captively consumed goods in respect of which the cost of production was undertaken was for the period January 2001 to December 2001. Therefore the Commissioner (Appeals) has erred in applying the Circular No. 692/08/2003-CX dated 13.2.2003 in the instant case. The Supreme Court in the case of H.M. Bags Manufacturers v. Collector of Central Excise - 1997 (094) ELT 3 (S.C.) has held that 'the effective date for the date of issuance of trade notice, must be held as the effective date for raising the demand and cannot be prior to that. This conclusion is reinforced by use of the word 'henceforth' by the Board. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; In the case in hand, it is undisputed that the respondent had taken the cost of production as per the cost accounting records and cost audit records required to be statutorily maintained by them as directed by Bureau of Industrial Cost & Pricing (BICP). The judgement of apex court in the case of Cadbury India Ltd. (cited supra) has laid down the law that the cost of production should be cost at the place where the product is manufactured and captively consumed. We find that the judgement of apex court squarely covers the issue in favour of the assessee. Accordingly, in view of the forgoing, we find that the appeal filed by the Revenue is devoid of merits and is rejected. The impugned order is upheld. Cross Obje ..... X X X X Extracts X X X X X X X X Extracts X X X X
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