CAS-4 cost certification governs captive consumption valuation; unsupported rejection of certified overhead treatment was not justified.

For captive consumption valuation, assessable value could not be enhanced by adding head office administrative overheads and R&D expenses where the assessee produced a cost accountant's certificate supported by books of account showing compliance with CAS-4. The adjudicating authority had merely raised doubts but rejected the certificate without any reasoned verification or contrary material. In the absence of evidence to displace the certified cost data, the certificate could not be ignored, and the proposed additions were not justified.

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Issues: Whether the assessable value for captive consumption could be enhanced by adding head office administrative overheads and R&D expenses when the assessee produced a cost accountant's certificate certifying compliance with CAS-4.

Analysis: The assessee produced a cost accountant's certificate, supported by books of account, stating that the treatment of interest, head office administrative overheads and R&D expenses in the cost of production was in accordance with CAS-4. The adjudicating authority had raised doubts on these components but discarded the certificate without assigning any reason or bringing any contrary material on record. In the absence of verification or evidence to reject the certificate, it could not be ignored.

Conclusion: The addition of head office administrative overheads and R&D expenses to the assessable value was not justified, and the issue was decided in favour of the assessee.

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