2017 (1) TMI 1488 - AT - Central Excise

Valuation - captive consumption - Certificate with respect to computation of the cost of production - whether certificate issued by Chartered Accountant with respect to computation of the cost of production, instead of being issued by Cost Accountant, is valid? - Held that - as per the Board Circular No. 979/3/2014-CX dated 15.01.2014 the certificate issued by the Chartered Accountant is also a valid certificate - When the certificate issued by the Chartered Accountant is valid one, there is no reason to interfere with the impugned order passed by the Commissioner (Appeals) - appeal dismissed - decided against Revenue.

Summary

Issues:
- Valuation of goods under Central Excise Valuation Rules
- Acceptance of certificate by Chartered Accountant for computation of cost of production
- Appeal against order-in-appeal by Department

Valuation of goods under Central Excise Valuation Rules:
The appeal was filed by the Department against an order-in-appeal passed by the Commissioner (Appeals) Central Excise, Raipur-I. The case involved the under-valuation of goods by the assessee-Respondents during the period from 2006-07 to 2007-08. It was observed that the goods were cleared to a sister concern without adding 10% to the cost of production as required under Rule 8 read with Rule 9 of the Central Excise Valuation Rules, 2000. The adjudicating authority confirmed the demand of duty along with interest or penalty based on the value. However, the appellate authority determined the assessable value under Rule 11 read with Rule 8 and Rule 9 for goods supplied to the sister concern for captive consumption. The appellate authority accepted the certificate of the Chartered Accountant for cost computation and adjusted the duty liability accordingly. The Department, aggrieved by this decision, filed the present appeal.

Acceptance of certificate by Chartered Accountant for computation of cost of production:
During the appeal hearing, the Department argued that the certificate for cost computation should have been issued by a Cost Accountant instead of a Chartered Accountant. However, it was noted that as per a Board Circular, the certificate issued by a Chartered Accountant is also considered valid. The Circular stated that calculations of manufacturing cost certified by a Chartered or Cost Accountant should normally be accepted. Only in specific cases where investigation is deemed necessary, steps like ordering a cost audit or summoning costing data should be taken. Given the validity of the certificate issued by the Chartered Accountant in this case, the Tribunal found no reason to interfere with the order-in-appeal and upheld the decision.

Appeal against order-in-appeal by Department:
After hearing arguments from both sides, the Tribunal upheld the decision of the appellate authority to accept the certificate issued by the Chartered Accountant for cost computation. As a result, the appeal filed by the Department was dismissed, affirming the order-in-appeal in favor of the assessee-Respondents.