2024 (3) TMI 401 - AT - Central Excise

Area Based Exemption - Rejection of application for special rate of value addition at the rate of 73% - payment of excise duty through PLA after utilizing the CENVAT credit available as per N/N. 20/2007-CE dated 25.04.2007 - HELD THAT - From formulae prescribed in N/N. 20/2008-CE dated 27.03.2008, it is clear that for fixation of special valuation rate, the actual cost of raw materials is to be considered only not the notional value. In that circumstances, as the Adjudicating Authority has considered the notional cost of raw materials, which is not correct, therefore, the impugned order is set aside. The impugned order set aside - Appeal allowed.

Summary

Issues involved: Appeal against rejection of application for special rate of value addition at 73%.

Facts: Appellant engaged in manufacturing pharmaceutical products in Sikkim, paid excise duty through PLA, applied for special value addition rate of 73.5% for FY 2009-10, officials calculated value addition at 58.12%, show-cause notice issued, application rejected, appellant contested, value addition determined at 58.86%.

Legal arguments: Appellant argued actual cost of raw materials should be considered for special value addition rate calculation, not notional value. Revenue supported the impugned order.

Decision: Tribunal found actual cost of raw materials should be considered, not notional value. Impugned order set aside, appellant entitled to special rate of 73.5% based on audited financial statement. Appeal allowed with consequential relief.