Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding
  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

Home Case Index All Cases Central Excise Central Excise + AT Central Excise - 2011 (4) TMI AT This

  • Login
  • Summary

Forgot password       New User/ Regiser

⇒ Register to get Live Demo



 

2011 (4) TMI 1106 - AT - Central Excise


Issues:
1. Determination of assessable value for goods cleared for captive consumption.
2. Interpretation of Rule 6(b) of Central Excise (Valuation) Rules, 1975.
3. Application of gross profit for captive clearances.
4. Precedent decision of the Tribunal on revenue-neutral situations.

Analysis:
1. The primary issue in this case revolves around the determination of the assessable value for goods cleared for captive consumption by the respondent, a manufacturer of bearings and parts. The department contended that the gross profit of the preceding financial year should be added to calculate the assessable value, as per instructions under Section 37B of the Central Excise Act, 1944.

2. The learned Commissioner, however, interpreted Rule 6(b) of the Central Excise (Valuation) Rules, 1975, and concluded that the profit element should be based on what the assessee would have normally earned on the sale of such goods. The Commissioner reasoned that the gross profit could not be applied since it was not earned on the sale of the goods in question, which were cleared for captive consumption within the same company.

3. The Tribunal noted that in a previous case involving the same respondent and a similar issue, it had decided in favor of the respondent, citing a revenue-neutral situation. The Tribunal found that the duty paid by one unit for captive clearances could be offset by another unit within the same company, making the situation revenue-neutral. Therefore, based on the precedent decision and the principle of revenue-neutrality, the Tribunal rejected the appeal filed by the Revenue.

4. The Tribunal's decision was based on the established precedent and the interpretation of relevant rules and provisions governing the valuation of goods cleared for captive consumption. By upholding the earlier decision in a similar case, the Tribunal maintained consistency and emphasized the concept of revenue-neutrality in such situations. The judgment highlights the importance of applying consistent principles in determining assessable value and resolving disputes related to central excise duty calculations for captive clearances within the same company.

 

 

 

 

Quick Updates:Latest Updates