https://www.taxtmi.com/caselaws?id=50610 For captively consumed intermediate goods valued under Rule 6(b)(ii) of the Central Excise (Valuation) Rules, 1975, notional profit must relate to the intermediate goods themselves. The profit earned on the final product cannot be adopted mechanically for the captive input, because that would ignore the different valuation basis and the absence of market sale of the intermediate goods. If final-product profit is used as a benchmark, it requires suitable downward adjustment, including for selling and distribution elements, to reflect the intermediate goods' notional profit. The text also notes that reliance on freight and a wholesale market theory under Section 4 of the Central Excise Act, 1944 went beyond the show cause notices. en-us Thu, 05 Jul 2001 00:00:00 +0530 Mon, 23 Aug 2010 16:57:39 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=50610 For captively consumed intermediate goods valued under Rule 6(b)(ii) of the Central Excise (Valuation) Rules, 1975, notional profit must relate to the intermediate goods themselves. The profit earned on the final product cannot be adopted mechanically for the captive input, because that would ignore the different valuation basis and the absence of market sale of the intermediate goods. If final-product profit is used as a benchmark, it requires suitable downward adjustment, including for selling and distribution elements, to reflect the intermediate goods' notional profit. The text also notes that reliance on freight and a wholesale market theory under Section 4 of the Central Excise Act, 1944 went beyond the show cause notices. Case-Laws Central Excise Thu, 05 Jul 2001 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=50610