2005 (10) TMI 391 - AT - Central Excise

Summary

Issues:
Assessable value of Lead and Zinc Concentrate cleared by the appellant from their own units, consideration of cost of production for arriving at assessable value, application of Rule 6(b)(ii) of Central Excise (Valuation) Rules, 1975, remand for ascertaining cost of production based on audited data, penalties set aside pending reassessment, re-consideration of demand for a specific period.

Analysis:
The appellant filed an appeal against the adjudicating order concerning the assessable value of Lead and Zinc Concentrate cleared to their own units. The dispute revolved around the demand raised for a specific period through show cause notices. The appellant argued that the assessment for a particular period was finalized after considering audited cost data, making the demand unsustainable. They contended that the cost of production varies monthly and should be based on audited data available at the end of the financial year. On the other hand, the Revenue maintained that the cost data was accumulated and correctly considered in the impugned order.

The issue at hand pertained to the cost of production of the intermediate product consumed internally. The assessable value was determined under Rule 6(b)(ii) of Central Excise (Valuation) Rules, 1975, incorporating cost of production plus profit. The appellant emphasized that cost of production could only be accurately determined at the end of the financial year due to production volume fluctuations monthly. Notably, assessments were provisionally treated upon the appellant's request and finalized annually based on the cost of the same financial year. Given the availability of audited cost data for the disputed period, the Tribunal deemed it appropriate to remand the matter for the adjudicating authority to ascertain the cost of production based on audited data and Rule 6(b)(ii) after providing a hearing to the appellant. Consequently, penalties were set aside pending reassessment, and the adjudicating authority was directed to re-examine the demand for a specific period based on finalized assessment, excluding it if already settled.

In conclusion, the appeal was disposed of through remand for a detailed reconsideration of the cost of production, application of valuation rules, and penalties, ensuring compliance with audited data and affording the appellant a fair hearing.