2013 (5) TMI 680 - AT - Central Excise

Valuation - non-inclusion of the cost of moulds in the final product manufactured and cleared - There is a Cost Accountant s certificate which indicate that the cost of moulds has been amortized while arriving at the value of final products on which the Central Excise Duty is discharged. - held that - both the lower authorities have not considered this issue in proper perspective and came to the summarary conclusion, which is not on consonance with the law. Both sides agree that the cost accountant s certificate should be seen and if the department is advised, may appoint their own Cost Accountant to find out whether the cost of moulds has been amortized or not. - matter remanded back.

Summary

Issues involved: Stay petitions, non-inclusion of cost of moulds in final product, Central Excise Duty, Cost Accountant's certificate, remand to adjudicating authority.

Analysis:
The judgment by the Appellate Tribunal CESTAT Ahmedabad, delivered by Mr. M.V. Ravindran, addresses two Stay Petitions that raise a common question. The Tribunal, after hearing both sides, notes that the issue revolves around the non-inclusion of the cost of moulds in the final product manufactured and cleared by the appellant. A Cost Accountant's certificate has been presented, indicating that the cost of moulds has been amortized in determining the value of the final products subject to Central Excise Duty. The Tribunal observes that the lower authorities did not consider this aspect adequately, leading to a conclusion not in line with the law. Both parties agree that the Cost Accountant's certificate should be thoroughly examined, and if necessary, the department can appoint its own Cost Accountant to verify the amortization of mould costs. The Tribunal deems this approach fair and instructs the department to appoint a Cost Accountant if they choose to do so, with the appellant's Cost Accountant required to cooperate. Following the receipt of the report, the appellant will be granted a personal hearing, and the matter will be decided on merit.

Consequently, the Tribunal sets aside the impugned orders and allows the appeals by remanding the case to the adjudicating authority for further examination and decision. The judgment emphasizes the importance of a thorough review of the cost of moulds in the final product for the proper application of Central Excise Duty, ensuring a fair and accurate determination in accordance with the law.