CAS-4 cost computation for assessable value remanded for fresh verification of overhead allocation and production cost.

Assessable value of the final product was required to be determined by cost of production under CAS-4, and the dispute centred on whether overhead expenses, including fixed overheads, were properly allocated in that computation. The appellant challenged the cost methodology and pointed to discrepancies in the calculation, while the adjudicating authority failed to address those objections in a reasoned manner. Because CAS-4 requires overheads to be absorbed according to prescribed norms, the disputed figures needed factual verification at the original stage. The matter was therefore remanded for fresh consideration and recalculation of cost of production in terms of CAS-4.

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Issues: Whether the assessable value of the final product was correctly determined by computing the cost of production in accordance with CAS-4.

Analysis: The dispute concerned whether overhead expenses and other components of cost were properly allocated under CAS-4. The appellant specifically challenged the method adopted for distributing fixed overheads and pointed out discrepancies in the calculation of cost of production. The adjudicating authority did not deal with those objections in a reasoned manner and merely proceeded on the basis that the cost of production had not been properly determined. Since CAS-4 requires overheads to be absorbed according to the prescribed norms, the disputed calculations required factual verification at the original stage.

Conclusion: The issue was not finally decided on merits by the adjudicating authority and the matter was remanded for fresh consideration and recalculation of cost of production in terms of CAS-4.

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