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[Prabhat Salecha]

M/s. Marico ltd. Supplies raw material costing ₹ 25000 to job worker/processor M/s. Indian Extrusion. M/s. Indian Extrusion processes the raw material and supplies an intermediate product 'Plastic containers' to M/s. APPL (being other unit of M/s. Marico ltd) for packing of hair oil manufactured by Marico Ltd. M/s. Indian Extrusion charged ₹ 1400 as processing charges which include ₹ 1200 as processing charges and 200 as its profit margins. The cost of transportation of RM to premises of Indian Extrusion is ₹ 200 and sending the plastic jars to APPL is 60 rs. The rate is 12% Compute assesable value of M/s Indian Extrusion?

AI Summary

Debate on Central Excise Duty Calculation: Rule 10A vs. Rule 8 for Captive Consumption of Goods. A query was raised regarding the computation of the assessable value for Central Excise duty involving M/s. Marico Ltd., M/s. Indian Extrusion, and APPL. M/s. Indian Extrusion processes raw materials from Marico Ltd. into plastic containers for APPL. The discussion focused on whether Rule 10A or Rule 8 of the Central Excise Valuation Rules applies, considering the captive consumption of goods. One participant suggested using Rule 8, calculating the assessable value at 110% of production costs, while another argued that Rule 10A applies only if the job worker sells the final product. The consensus leaned towards calculating duty based on transaction value under Section 4, dismissing the captive consumption approach.