9911796707
TMI Blog2018 (7) TMI 1930X X X X Extracts X X X X X X X X Extracts X X X X ..... /77202/2018 - Dated:- 4-7-2018 - SHRI P.K.CHOUDHARY, Member (Judicial) And SHRI Bijay Kumar, Member (Technical) Shri T.C. Nair, Advocate for the Appellant (s) Shri H.S. Abedin, AC(AR) for the Respondent (s) ORDER Per Shri P.K.Choudhary The issue involved in the instant case pertains to valuation of SURF and SUNLIGHT branded Bulk Detergent Powder stock transferred by HUL to their job-workers for packing into smaller consumer packs, wherein the appellants have done the costing based on CAS-4 formula, whereas Department holds that certain elements like cost of service were not included. 2. Facts of the case in brief are that the appellant manufactures inter-alia Bulk Detergent Powder under the brand name SURF and SUNLIGHT falling under Chapter 34 of CETA, major portion of which is captively consumed by them in their factory and certain portion was stock-transferred to their job workers for packing into smaller consumer packs. Since there was no comparable sales price available for the Bulk Detergent Powder, appellants were paying duty on the value arrived at based on cost certific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pose of costing, in the absence of any contrary evidence adduced by the department, based on the settled position of law on the issue. The cost of production of captively consumed goods/intermediate was to be determined strictly in accordance with CAS-4, based on CBEC Circular dated 13.02.2003, in support of which he relied on the following judgments; i) Cadbury India Ltd. [2006(200)ELT 353(SC)] ii) Raymonds Ltd. [2006(204) ELT 3 (SC)] iii) Uflex Ltd. [2016(335) ELT 376 (Tri.)] Ld. Advocate further submits that the job-workers were paying duty on the consumer packs on the ultimate sales price (MRP) of appellant and, hence, it was deemed that all elements of cost and expenses till the goods enter into wholesale market were included in such MRP. In any case, appellant did not have any undue gain by undervaluing the Bulk Detergent Powder stock-transferred to their job-workers for repacking, as whatever duty paid by appellant was available as cenvat credit to the job-workers and both, appellant and the job-workers were paying duty from PLA also, over and above utilizing cenvat credit. Therefore, entire exercise lead to revenue neut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a, penalty is also not sustainable. e) In the last the appellant prayed that the impugned order may be set aside. 4. Ld. DR reiterates the discussions and findings of the impugned order. From the break-up sheet for Raw Material Consumption for SURF and SUNLIGHT and WHEEL for the period April, 2007 to December, 2007 the quantity and value of HS Diesel and Water was found shown to be 0 0.00 and total absence of even mention of Furnace Oil, makes it ample evident that the claim of the said appellant that the cost elements viz. Power, Water, Furnace Oil and HS Diesel have been duly considered and incorporated in the costing of the said goods as per CAS-4 for the purpose of valuation for captive consumption is untrue and hence not acceptable. 5. Heard both sides and perused the appeal records. 6. We find that the issue is no more resintegra in view of the decision of the Hon ble Supreme Court in the case of Commissioner of Central Excise, Pune vs. Cadbury India Ltd. [2006(200) ELT 353 (S.C.)]. The Hon ble Supreme Court has held that cost of production of captively consumed goods to be determined strictly in accordance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a working condition. That rule of accountancy had to be adopted for determining the actual cost of the assets in the absence of any statutory definition or other indication to the contrary. 12. Subsequent to the filing of these appeals, the Institute of Cost and Works Accountants of India (ICWAI) has laid down the principles of determining cost of production for captive consumption and formulated the standards for costing: CAS-4. According to CAS-4 the definition of cost of production is as under : Cost of Production : Cost of Production 4.1. shall consist of Material consumed, Direct wages and salaries, Direct expenses, Works overheads, Quality Control cost, Research and Development cost, Packing cost, Administrative Overheads relating to production. 13. The cost accounting principles laid down by ICWAI have been recognized by the Central Board of Excise and Customs vide Circular No. 692/8/2003-CX., dated 13-2-2003. The circular requires the department to determine the cost of production of captively consumed goods strictly in accordance with CAS-4. 14.The Tribunal in the case of BMF Beltings Ltd. v. CCE : 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
