Just a moment...

⚠✕
❮ Top
☎ Help
☰
×

By creating an account you can:

Logo TaxTMI
>
Call Us / Help / Feedback✕

Contact Us At :

✉ E-mail: [email protected]

✆ Call / WhatsApp at: +91 99117 96707

For more information, Check Contact Us

FAQs :

To know Frequently Asked Questions, Check FAQs

Most Asked Video Tutorials :

For more tutorials, Check Video Tutorials

Submit Feedback/Suggestion :

Email :
Please provide your email address so we can follow up on your feedback.
Category :
Description :
Min 15 characters0/2000
╳
Add to...
You have not created any category. Kindly create one to bookmark this item!
✕
Create New Category
Hide
Title :
Description :

Print Options

+ Post an Article
Post a New Article ✕
Title :
0/200 char
Description :
Max 0 char
Category :
Co Author :

In case of Co-Author, You may provide Username as per TMI records

Delete Reply

Are you sure you want to delete your reply beginning with '' ?

Delete Issue

Are you sure you want to delete your Issue titled: '' ?

Articles

Back

All Articles

Advanced Search ❮
Reset Filters
Search By:
Search by Text :
Press 'Enter' to add multiple search terms
Select Date:
FromTo
Category :
Sort By:
Relevance Date
PrevPreviousNextNext

Interest expenditure, depreciation and profit margin not be taken into consideration for arriving at the cost of production

Bimal jain
Interest, Depreciation, and Profit Margin Excluded from Excise Duty Calculation Under CAS-4, Supreme Court Rules. The Supreme Court ruled that interest expenditure, depreciation, and profit margin should not be included in the cost of production for calculating Excise duty, as per Costing Accounting Standard - 4 (CAS-4). This decision arose from a case involving a manufacturing company that was accused by the Department of undervaluing its products by excluding these elements from its cost calculations, leading to a lower duty payment. The company produced Linear Alkyl Benzene, used both in its own factory and supplied to sister units, and was initially paying duty according to Rule 8 of the Excise Valuation Rules. (AI Summary)

C.C.E., Vadodara-I Vs. Nirma Ltd. & Ors. [2015 (11) TMI 605 - SUPREME COURT]

Nirma Ltd. & Ors. (“the Respondent”) was engaged in the manufacture of Linear Alkyl Benzene (“LAB”) which was cleared by the Respondent to its sister units located in different places and was also used captively in the same factory where the said LAB is manufactured. The Respondent was paying Excise duty as per Rule 8 of the Excise Valuation Rules. The Department has demanded the differential duty by alleging that costing as done by the Respondent was not in accordance with the method of costing and it resulted in undervaluation and thus, paid lesser amount of duty.

The Department sought to include following three elements of cost for arriving at the cost of production:

  • Interest expenditure;

  • Depreciation; and

  • Profit margin

The Hon’ble Supreme Court has held that in accordance with the Costing Accounting Standard – 4 (CAS-4), interest expenditure, depreciation and profit margin not be taken into consideration for arriving at the cost of production for the payment of Excise duty.

Central Excise
answers
Sort by
+ Add A New Reply
Hide
+ Add A New Reply
Hide
Recent Articles