TMI Blog2004 (7) TMI 193X X X X Extracts X X X X X X X X Extracts X X X X ..... ntral Excise Rules, 1944 in respect of these goods manufactured and catively consumed in their factory for packing of cigarettes and have declared the value under Section 4 arrived at by cost construction method by enclosing Chartered Accountant Certificate certifying the cost of material. It was found from the price declaration filed from 1995-1996 onwards on cost construction method under Rule 6(b)(ii) of Central Excise Valuation Rules, 1975, they have not included the element of indirect overheads and margin of profit that should have been arrived at. Therefore, all these price declarations were provisionally assessed under Rule 9B of Central Excise Rules, 1944, from time to time and on furnishing the final cost audit certificates showing cost of production. It was noticed that they have not taken into account the element of interest charges incurred on machines purchased for the side making department and that they have also not included the margin of profit that should have been arrived at based on the price Circular No. 258/92/96-CX., dated 30-10-1996. (F. No. 6/28/94-CX. 1). Therefore, Show Cause Notices were issued to them proposing to re-determine the assessable value by i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rames. The Hon'ble Supreme Court in the case of Moti Laminates Pvt. Ltd. Ors. v. CCE, Ahmedabad - 1995 (76) E.L.T. 241, had held in Para 11 of the judgment that the duty is attracted not because an article is covered in any of the items or it falls in residuary category but it must further have been produced or manufactured and it is capable of being bought and sold. Without prejudice to what is stated in the above grounds, the two issues relating to valuation in terms of Rule 6(b)(ii) of the Valuation Rules, 1975 are (i) the addition/deductions to be taken into account while working out manufacturing cost and (ii) the profit to be considered while working out the value. The valuation rules envisages only inclusion of any profit which the assessee would have earned on the sale of such goods. There was no sale of slides and inner frame and consequently no profit was earned by the appellants. The 05 (five) members bench of the Tribunal in the case of Raymonds Ltd., v. CCE, Aurangabad reported in 2001 (129) E.L.T. 327 has laid down the principles for computing the value and specifying that "profit if any" is the profit that the assessee would have normally earned on the sale of such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in the show cause notice and the decision of the Lower Authorities from 24-1-2000 onwards of the show cause notices were identical. Even in reply to the show cause notice, there is no issue of manufacture or excisability. The Assistant Commissioner has given the finding that the appellants are not selling the goods hence he has to go by Valuation Rules and on the basis of the cost construction methods. The Commissioner (Appeals) has also given his finding on finalisation the price lists. If the appellants are aggrieved regarding the excisability of the goods, then they should have challenged the classification lists, which were not done by them. They cannot raise the issue of excisability or marketability of the goods when the issue which was raised in show cause notice and decided by the Lower Authority is about the finalisation of price lists provisionally approved earlier. 5.The Asst. Commissioner has only noted in his order that the appellants are not selling the goods. Therefore he has to go by the Valuation Rules on cost construction basis as the goods are not sold and value is not available. It does not mean that the Asst. Commissioner has given a decision regarding exci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sence of any materials to show that there was any requirement to make adjustment of the profit from one product to the other and no materials are placed before the court to show that the notional profit margin on the captively consumed goods is less than the actual profit margin of the final product." Therefore, margin of profit has to be calculated as per the audited balance sheet of the Company as a whole. 7.We have carefully considered the submissions made by both the sides. We find that this appeal has arisen consequent to the order passed by the Asst. Commissioner on finalisation of the provisional assessment of the price lists. Since the issue relates to only finalisation of provisional assessments of price declaration filed by the appellants, the question of raising the issue of non-excisability of product cannot be taken in this appeal. The appellants were in litigation on the issue of classification which has been decided against them by this Tribunal. Therefore, they cannot raise the same issue again before the Tribunal when they have gone in an appeal. 8.The issue before us is the valuation of goods. The appellants have challenged the valuation adopted by the lower ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... untant fixed at 10%. Therefore, I am of the opinion that the opinion given by the Department and accepted by the assessee earlier stands to reason." This was confirmed by the High Court of Karnataka in W.A. Nos. 771 772/1989 in case of Asst. Collector of Central Excise Ors. v. M/s. Motor Industries Co. Ltd. We also find that in case of Raymonds Ltd. v. CCE, Aurangabad - 2001 (129) E.L.T. 327, the Larger Bench of the Tribunal has held that - "Cost of Production. - "Profit, if any" to be taken into account while determining the value under Rule 6(b)(ii) is the profit that the assessee "would have normally earned on the sale of such goods" and not the actual profit earned. Profit or loss made by the manufacturer from other activities, be they manufacturer of other goods or trading in other goods, are of no relevance while determining the assessable value for captively consumed goods." Therefore, we agree with the appellant's contention that the total profit of the Company as adopted from their balance sheet cannot be adopted for determining the margin of profit for slides and inner frames. 9.We find that interest on loan taken for purchase of machinery cannot form a part o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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