9911796707
TMI Blog1997 (1) TMI 170X X X X Extracts X X X X X X X X Extracts X X X X ..... k in Part IV(a) under Rule 6(b)(ii) of the Central Excise Valuation Rules, 1975 showing cost of raw materials, charges and 5% as margin of profit. The Balance Sheet showed the profit in regard to the end-product as 30.89%. Notice was issued to appellant to show cause why 30.89% should not be taken as notional profit in regard to printing ink. Notice was resisted by the appellant but was confirmed by the Assistant Collector. His order was confirmed by the Collector (Appeals). Hence the present appeal. 3. According to Rule 6(b)(ii) of the Valuation Rules, valuation should be based on the cost of production or manufacture including profits, if any, which the assessee would have normally earned on the sale of such goods. There is no dispute i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it linked with the finished product as shown in the balance sheet was added and the Tribunal holding that what was done was reasonable declined to interfere. In Kanoria Chemical Industries v. Collector of Central Excise, Allahabad - 1995 (80) E.L.T. 795 the party declared notional profit margin as 5% which was increased by the Assistant Collector to 10% in the absence of specific data. Collector (Appeals) held this to be arbitrary and directed the Assistant Collector to add 6.97% as margin of profit since this percentage of profit had been earned on bleaching powder. Tribunal observed that since the intermediate products were not sold as such profit earned with reference to the finished product has to be taken into consideration while deter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tral Excise, Belgaum - 1996 (81) E.L.T. 403 (Tribunal) question arose with reference to valuation of wrapper paper used in the packing of other varieties of paper. This aspect was not considered. What was considered was what should be done where an assessee was normally making profit but in a particular year incurs loss. Assistant Collector had gone by the profit shown in the Balance Sheet. Tribunal declined to interfere. 5. In Appeal E/4294/89-A decided on 23-12-1996, referring to the decisions in Dhrangadhra Chemical Works Ltd. - 1988 (35) E.L.T. 202, Bimetal Bearing Ltd. - 1996 (81) E.L.T. 246, Kanoria Chemicals - 1995 (80) E.L.T. 795 and West Coast Paper Mills - 1996 (81) E.L.T. 403, the Tribunal held that there is nothing wrong in lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sary having regard to all other circumstances adverted to earlier. 7. Profit margin on the final products in the case in question was 30.89% and the final products were calendars and labels which are consumer products and in wide circulation. They cannot be compared with intermediate product such as printing ink which is used only by printing processors. In these circumstances the notional profit margin for the printing ink cannot be held to be the same as the margin of profit for final products. Therefore the view taken by the lower authorities does not appear to be correct. Instead of remanding this old case to the adjudicating authority, we deem it fit to reduce the margin of profit from 30.89% to 20%. 8. Appeal allowed in part as in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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