9911796707
TMI Blog2015 (4) TMI 816X X X X Extracts X X X X X X X X Extracts X X X X ..... arma, Adv., Mr U Banerjee, Adv., Mr K R Sasiprabhu, Adv., Mr Devan Parikh, Sr. Adv., Ms Nandini Gore, Adv., Mr Abhishek Roy, Adv., Ms Devina Sehgal, Adv., Ms Khushboo Bari, Adv., Mrs Manik Karanjawala, Adv., Mr V Lakshmikumaran, Adv., Mr M P Devanath, Adv., Mr Vivek Sharma, Adv., Ms L Charanaya, Adv., Mr Aditya Bhattacharya, Adv., Mr R Ramachandran, Adv., Mr Hemant Bajaj, Adv., Mr Ambarish Pandey, Adv., Mr Rajesh Kumar, Adv. and Mr Anandh K, Adv. ORDER Civil Appeal Nos. 5007-5024 of 2004 The respondents herein are engaged in the manufacturing of yarn and fabrics. The yarn was captively consumed in the manufacture of fabrics. The respondent were paying the duty on the yarn at the spindle stage on the basis of cost of construction arrived ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s on the ground that the larger period of limitation was not invocable against the respondents herein and accordingly set aside the demands of duty on them. It was also held that the cost accountants were the experts authorized by the law to do the costing of production of the goods and their duly certified statements/ reports relating to such costing were legally authentic enough to be acted upon by their clients and any error found in such certificates would not be a valid ground for any authority to proceed against the clients criminally or quasi-criminally. From the aforesaid, it is clear that the only issue is as to whether extended period of limitation could be applied in these cases. As pointed out above, the period involved is Apri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hearing the counsel for the parties on both sides and going through the records, we find that the respondents-assessees are correct in their submissions on both the counts and the CESTAT has rightly accepted their case. Insofar as the first aspect noted above is concerned, we have been shown the declaration which was given to the Excise Department in the proforma. As per the said proforma, it is only the cost of the goods and conversion charges that had to be stipulated and it was so done. On the other hand, when we examine the relevant provision of Cost Accounting Records (Textile) Rules, 1977, we find that these Rules specifically deal with the inclusion of overheads, yarn/cloth in grey stage for self consumption, and costs statements w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty apart from administrative expenses as well as sales and distribution expenses are added as cost of elements. Therefore, bonus, interest and gratuity are to be added to arrive at cost of sales and not the cost of production. It was because of this Proforma that the respondents-companies were required to include the cost of bonus, interest and gratuity which otherwise was not of relevance insofar as the matter of excise is concerned. We also find that earlier there was some ambiguity and it was not clear as to whether cost of labour, bonus, etc., is to be included while arriving at the cost of captive consumption of this item. This was clarified only vide circular dated 30.10.1996 issued by the Central Board of Excise and Customs, New Delh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rive at the assessable value of captively consumed goods." The clarification, as noted above, pertains to calculation of value of goods captively consumed under Rule 6(b)(ii). It is this Rule which is undoubtedly applicable in the present case. Thus, for the first time, only in October, 1996, it was clarified that the cost of material, labour cost and overheads including administrative cost, advertising expenses, depreciation, interest, etc., would be included in the cost of production. The period with which we are concerned is prior to October, 1996, i.e., April, 1994 to September, 1996. It, therefore, cannot be said that the respondents-companies made intentional misdeclaration with the purpose to avoid payment of correct excise duty. We ..... X X X X Extracts X X X X X X X X Extracts X X X X
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