TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Tribunal Upholds Addition of Profit Element to Captively Consumed Goods Cost Price</h1> <h3>GRAPHITE INDIA LTD. Versus COLLECTOR OF CENTRAL EXCISE, CALCUTTA</h3> GRAPHITE INDIA LTD. Versus COLLECTOR OF CENTRAL EXCISE, CALCUTTA - 1995 (78) E.L.T. 17 (Tribunal) Issues:Valuation of goods captively consumed in the factory.Analysis:The judgment involved two appeals addressing a common issue of the valuation of goods captively consumed in the factory. The appellants, who are manufacturers of Graphite Electrodes & Anodes, produced Head Blocks for their furnaces, which were not classified as Graphite Electrodes & Anodes. The dispute centered around whether the value of these Head Blocks should include a notional profit linked to the finished product. The appellants argued that since the Head Blocks were not sold but used for captive consumption, adding a profit element was not justified. They relied on a previous Tribunal decision that stated the goods were not marketable and thus not dutiable. However, the Department contended that the Head Blocks were marketable based on a later Tribunal decision and that a profit element should be added to the cost price for valuation purposes.The Tribunal considered both arguments and concluded that the issue of marketability had already been settled in a previous decision regarding the same appellants. Therefore, the critical question was whether adding a profit element to the cost price was justified. The Tribunal found no fault in the authorities' decision to add 50% profit to the cost price, as the Head Blocks were directly related to the manufacture of Graphite Electrodes and Anodes, even though they were not sold as standalone products. The profit percentage adopted was deemed reasonable, considering the connection between the Head Blocks and the finished products. Consequently, the Tribunal upheld the authorities' order and dismissed the appeals filed by the appellants.In summary, the judgment clarified that the valuation of goods consumed internally in a factory may involve adding a profit element to the cost price, even if the goods are not sold in the market. The decision emphasized the relevance of the goods' relationship to the finished products and upheld the authorities' determination of the value in this case.
TaxTMI 
TaxTMI 
