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of <h1>Tribunal overturns Central Excise Duty assessment based on previous year's profit margin for razor blade manufacture.</h1> The Tribunal set aside the demand for Central Excise Duty assessment based on a 17.46% profit from the previous year's balance sheet for the manufacture ... Valuation - Profit Issues:Assessment of Central Excise Duty based on profit percentage from the previous year's balance sheet.Analysis:The appeal was filed against the Order-in-Appeal passed by the Commissioner (Appeals) concerning the manufacture of Razor Blades, Twin blade cartridges, and plastic parts of shaving. The appellants were declaring the manufacturing cost plus 10% as profit for Central Excise Duty assessment. A Show Cause Notice (SCN) was issued proposing to add 17.46% profit to the cost of razor parts based on the previous year's balance sheet showing a profit of 17.46%. The adjudicating authority upheld the demand, which was also dismissed in the appeal.The appellant argued that during the relevant period, the profit was only 0.32% according to the balance sheet, a fact not disputed by the Revenue. The Revenue insisted on adding 17.46% profit based on the previous year's balance sheet, citing a Board Circular. The appellant referenced a Tribunal decision in the case of Raymonds Ltd., emphasizing that the profit to be considered for captively consumed goods should be what the assessee would normally earn on the sale of such goods.The Tribunal noted that the appellants were adding a notional profit of 10% to the cost of manufactured goods for Central Excise Duty assessment, while the actual profit during the relevant period was 0.32%. Referring to the Raymonds Ltd. case and the Board Circular, the Tribunal held that the profit to be included in the assessable value of captively consumed goods should be the profit the assessee would typically earn on the sale of such goods. Consequently, the demand based on a 17.46% profit from the previous year was deemed unsustainable. The impugned order was set aside, and the appeal was allowed.
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