TMI Blog2016 (3) TMI 344X X X X Extracts X X X X X X X X Extracts X X X X ..... o be rejected by the Revenue without any valid legal grounds. Revenue adopted highly arbitrary and imaginative methodology to arrive at the value of these impugned goods. The value of shim is arrived at from the value of final product - hologram - by deductive method. This is not supported by any provisions of law or approved standards of accounting/costing. The best judgement under Rule 11 of Valuation Rules does not permit such arbitrariness and imaginative valuation. The impugned goods are admittedly "capital goods" falling under Chapter 84 of CETA. The provisions of exemption Notification NO.67/95-CE dated 16.03.1995 is clearly applicable to the impugned goods as they are used captively within the factory of production. The exclusion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellants are engaged in the manufacture of polyester film, shim, BOPP and articles of plastics liable to Central Excise duty. They are availing cenvat credit on various inputs, capital goods arid input services. Proceedings were initiated against the appellant for demanding differential duty on captively consumed hard copy shim used in the manufacture of exempted final product hologram. Revenue felt that the valuation of the said shim was not proper under Rule 8 of Central Excise Valuation Rules, 2000. The main thrust of allegation by Revenue is that shim manufactured and consumed captively by the appellant are not properly valued because the technical expertise which goes into the product is indeterminable by the present method of CAS-4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in area. They never sold hard copy shim during relevant period; (b) Hard copy shim is classifiable under CTH 84425010. These are manufactured and captively consumed in the manufacture of exempted holograms. Rule 8 of Valuation Rules is clearly attracted in such situation. The costing has been done as per CAS-4 standards. The mind/expertise/technology have all been duly factored in by the appellants in their books of accounts. No extra external expenditure was ever alleged or proved by Revenue; (c) There is absolutely no authority or sanction under law to follow deductive method of valuation - starting from finished final product cleared on sale to arrive at cost of intermediate product captively used in the manufacture of such finish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. For arriving at the value for Central Excise purpose, the appellant followed provisions of Rule 8 and general principles of costings as per CAS-4 standards. This is also in terms of Board's Circular dated 13.02.2003. Now, we find that the value adopted by the appellant was sought to be rejected by the Revenue without any valid legal grounds. The following points are relevant: (a) The correctness of CAS-4 calculation itself has not been questioned with supporting evidence by Revenue; (b) No extra expenditure on supposed complex security feature of the impugned goods has been alleged; (c) The Revenue did not initiate action independently to ascertain by another Cost Accountant whether the CAS-4 calculation by appellant is cor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able to the present case. The Hon'ble Supreme Court held that the Department is also bound by the Circular dated 13.02.2003. 7. Regarding the second point for decision, we find that the impugned goods are admittedly capital goods falling under Chapter 84 of CETA. The provisions of exemption Notification NO.67/95-CE dated 16.03.1995 is clearly applicable to the impugned goods as they are used captively within the factory of production. The exclusion provided in the proviso of the said notification shall apply only to inputs not capital goods. We find the reasoning given by the original authority to deny the said exemption as totally misconceived. Rule 6 (4) of Cenvat Credit Rules, 2004, has no application to decide the eligibility o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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