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CAS-4 apply prospectively and also for the period prior to issue of Board’s Circular

Central Excise - By: - Rakesh Singh - Dated:- 31-12-2015 - Provisions of CAS-4 apply prospectively and also for the period prior to issue of Board s Circular CCE Nashik Versus Mahindra & Mahindra Ltd. 2015 (12) TMI 1353 - CESTAT MUMBAI ISSUES: 1. Inclusion of selling and distribution of expenses and the corporate office expenses during the period October 1997 to June 2000 to clear parts of motor vehicle to their own sister concern; 2. It was the case of the Revenue that respondent should hav .....

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e was adjudicated by the Commissioner of Central Excise, Nasik vide order dated 27.04.06 (referred supra). The learned Commissioner observed that the Institute of Chartered Accountants of India had issued Accounting Standards 2 (AS 2) for the purposes of determination of cost of production in a case of stock transfer of goods. Similarly the Institute of Cost and Works Accountants of India had also issued guidelines (CAS 4) for determination of cost of production wherever the goods are captively .....

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CBEC itself had issued a Circular No. 692/08/2003-CX dated 13.2.2003 wherein they had directed that cost of production of captively consumed goods will henceforth be done strictly in accordance with CAS-4,. On this basis, the learned Commissioner came to the conclusion that Head office administrative expenses, selling and distribution costs, interest etc. are not includable in the assessable value of product used in captive consumption. As regards expenses on account of research and development .....

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argument adduced is that the CBEC Circular dated 13.2.2003 is applicable only prospectively and not retrospectively and prior to 13.2.2003, the cost has to be computed on the basis of Circular dated 13.10.96 and, therefore, head office administrative expenses, interest charges and selling and distribution expenses are includable in the assessable value. In other words what is stated is that CAS-4 provisions will not apply prior to 1.3.2003. 2. In view of the foregoing, we hold that the impugned .....

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