2003 (9) TMI 89

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..... uestion has arisen as to the value of these sheets for the purposes of excise duty. 2.The assessment year in question is 1976-77. Section 4 of the Central Excises and Salt Act, 1944 as it then stood (hereinafter referred to as 'the Act') provided for the valuation of excisable goods for the purposes of charging of duty of excise. Sub-section (1) provides that such value shall be deemed : The normal price thereof, that is to"(a) say, the price at which such goods are ordinarily sold by the assessees to a buyer in the course of wholesale trade for delivery at the time and place of removal, where the buyer is not a related person and the price is the sole consideration for the sale. where the normal price of such goods is(b) not ascertainab .....

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..... material characteristics of the goods to be assessed and of the comparable goods : if the value cannot be determined under sub-clause (i), on the cost of production or manufacture, including profits, if any, which the assessee would have normally earned on the sale of such goods :" We are concerned with Rule 6(b)(ii). 4.According to the appellant the cost of production referred to in that sub-rule must mean the actual cost of production together with the notional profits which would have been earned if the excisable goods had been sold. 5.The Revenue Authorities, on the other hand, contend that the value of the excisable goods must be decided on the basis of the notional sale of the very same goods without taking into consideration wha .....

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..... rder of the Collector was sought to be reviewed under Section 36(2) of the Act. The review was ultimately disposed of by the impugned order of the Tribunal. The reasoning of the Tribunal was that the scrap of the sheets had some value which would be the notional value for the purposes of determining the value of the fresh sheets. The Tribunal seems to have overlooked the fact that the notionality under Rule 6(ii) attaches only to the profits and not to the other costs of production. As said in the case of Collector of Central Excise, Pune v. Dai Ichi Karkaria Ltd., reported in 1999 (112) E.L.T. 353 that the cost of the excisable product for the purposes of assessment of excise duty under Section 4(1)(b) of the Act read with Rule 6 of the Va .....

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