2000 (9) TMI 176 - AT - Central Excise

Summary

Issues involved: Valuation of milk crumbs, refined milk chocolate, and other products manufactured by the appellant for captive consumption.

Summary:
The Appellate Tribunal CEGAT, Mumbai considered the valuation of goods manufactured by the appellant for captive consumption. The appellant sought valuation under Rule 6(b)(ii) based on the "cost of production on manufacture including profits." The Department, however, added various expenses to the declared value, leading to a dispute. The Commissioner (Appeals) justified including all expenses based on interpretations of rules and past judgments.

The Tribunal analyzed the rule and previous decisions to determine the correct approach. It noted that the rule applies when goods are not sold and there are no comparable goods, making the concept of profit challenging in such cases. The Tribunal cited precedents to support the view that only specified elements should be included in the assessable value under Rule 6(b)(ii).

Regarding the Commissioner's reliance on circulars and judgments, the Tribunal clarified that such references should not override clear statutory provisions. It emphasized that discretion in assessments should not be constrained by external instructions. The Tribunal also differentiated the current case from past judgments related to inclusion of costs in assessable value.

Ultimately, the Tribunal ruled that expenses beyond production costs, raw materials, and profit should not be included in the assessable value. It directed the appellant to provide evidence of expenses related to the factory for further consideration by the Commissioner (Appeals). The appeal was allowed, setting aside the impugned order and potentially entitling the appellant to a refund of deposited amounts.