9911796707
TMI Blog2023 (4) TMI 970X X X X Extracts X X X X X X X X Extracts X X X X ..... ell as for use by their job workers for manufacture of complete footwear. They did not make proper determination of assessable value of the said goods in terms of Section 4 of the Central Excise Act, 1944 read with Central Excise (Valuation) Rules, 1975 for the period of April' 1996 to August' 1998. They determined the assessable value of footwear components on the basis of cost @ 6% to 10% of the prime cost which is much lower than that of prime cost @ 51% towards captive consumption in their own factory. The element of profit margin was considered between 0.02% to 0.9% instead of @ 2.9% for 1997-98. The administrative overhead and advertising expenses and interest were totally ignored. Thus they undervalued the footwear components cleared ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting of the goods covered under captive consumption within the meaning of Central Excise Law in force is correct or not. Perusal of records reveals that the respondent under valued the goods i.e. footwear components which they cleared for consumption in their other units and in the job workers premises by way of contravening the provisions of Valuation in terms of Section 4(1)(b) of the Central Excise Act, 1994 and under Rule 6(b)(ii) of the Central Excise (Valuation) Rules, 1975. Rule 6(b)(ii) of the Central Excise (Valuation) Rule states that the value should be cost of production + profit margin (if any). Thus, cost of production has to be determined taking into account all the cost starting from inputs to the manufacturing of the footwe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opportunity of Personal Hearing to the respondent." 5. The Appellant is before us against the Order-in-Appeal passed by the Ld. Commissioner(Appeals) on the ground that the Adjudicating Authority has dropped the demand on merit as well as on Limitation, in the Order dated 28/01/2009. The Department preferred appeal against the O-i-O under section 35 E (4) only on merits and dropping of the demand on the ground of Limitation by the adjudicating authority in the O-i-O has not been appealed by the department. The remand order by Commissioner (Appeals) would appear to accept the Department's case, in principle. Hence, they requested to set aside the O-i-A dated 25/02/2010. 6. The Revenue is also in Appeal before us against the Order-in- Appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eals). Hence, the order of the Ld. Adjudicating authority dropping the demand on the ground of limitation still survives. We find that the Department has not filed Appealed against dropping of the demand by the adjudicating authority on the ground of Limitation. But, we find that vide the O-i-A dated 25/02/2010, the Ld Commissioner Appeals had set aside the O-I-O dated 28/01/2009. Hence, the O-i-O dated 28/01/2009 is not available today. Hence, this ground raised by the Appellant cannot be considered. But, we take Note of the fact that the O-i-O has dropped the demand on the ground of Limitation which was not challenged by the Department while arriving at a decision in this case on merits. 10. In the Order-in-Appeal, the Ld. Commissiner(Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the wages as the overhead charges to arrive at the cost of the final product. He stated that if this method is adopted, then there is no under-valuation and consequently, there is no demand also. 12. We find merit in the argument of the Appellant. The cost of raw material vary depending upon the raw material used and hence a variable item like 'raw material' cannot be the basis for working out the 'overhead charges'. The Appellant arrived at the 'overhead charges' as a percentage of 'wages' which appears to be more appropriate than adopting raw material cost, to arrive at the 'overhead charges'. We find that the Appellant has already paid duty on the basis of the cost arrived at based on the method cited above. Thus, we find that there ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
