TMI Blog2000 (9) TMI 176X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacture of chocolate. 2. No part of these products is sold by the appellant; nor we are told, is any such product manufactured by any other manufacturer. Accordingly the appellant had sought valuation of these goods under Rule 6(b)(ii) of the rules. This rule provided for basing the valuation on such goods on the cost of production on manufacture including profits, if any, that the assessee would have earned in the sale of such goods . It filed a declaration showing the price of these goods supported by a statement verified by a chartered accountant. The statement indicated the cost of edible and packing material used in the manufacture and the manufacturing overheads. A separate statement in support of the profit added was formulated. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The provisions of sub-rule (ii) of Rule 6(b) would necessarily have to be invoked only in situations where the goods are not sold and there are no comparable goods. How profit could be conceived of on the sale of goods which are not sold, and in a situation where comparable goods are not sold, is difficult to visualise. It is apparently for this reason that the practice of applying the profit of the manufacturer as a whole product has been sanctioned by the Tribunal in number of decisions. Since the rule contemplates margin of profit to be added and there could be obviously no margin of profit in a situation where there is no sale, same meaning has to be given to the rule. This is what the Tribunal has said in CCE v. Bimetal Bearing Ltd. - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, which showed the net price of these motors. The Tribunal accepted the explanation offered by the appellant, that a notional sale price was arrived at for only accounting purpose, only that there was no real sale price since there was no sale of motors. It emphasised that valuation was done under Rule 6(b)(ii), such value being the sum total of the raw material manufacturing cost and profit margin. These two decisions emphasised that it is not permissible to go beyond the element specified in the sub-rule. 7. We are not able to see the relevance of the judgment of the Bombay High Court in Kamala Mills Ltd. - 1986 (25) E.L.T. 24 relied upon by the Advocate for the Department The judgment of the Court that the excise duty paid on cotton ya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of an article including those which have enriched the value and add to its marketability contribute to the value. It says therefore that the expense incurred on account of several factors which have contributed to the value up to the value of sale would be included in the assessable value. In this, it includes charges such as marketing and selling organisation expenses including advertising. It specifically noted that advertising and marketing expenses promote the marketability of the assessee and enter into the value of the commodity. These considerations are inapplicable in a situation where there is no marketability of goods captively consumed. The question of advertising does not arise. 10. We therefore hold that the expenses other tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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