1995 (9) TMI 138

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... point to be considered in all these cases is that whether margin of profit is to be added to the goods captively consumed and if so to what extent. The appellants are engaged in the manufacture of Metal Containers which they used captively for Stable Bleaching [Powder]. The Assistant Collector while approving the price list with reference to Section 4(i)(b) read with Central Excise Rules has enhanced the margin of profit from 5% to 10% observing that in the absence of any specific basis available for determining margin of profit, 10% margin of profit could not be malacious or unjudicious. On appeal filed by the party the Collector (Appeals) accepted the contention of the party that adding 10% margin of profit was arbitrary and since the ma....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ct. He said that notional profit is required to be added to the cost price of the goods which were captively consumed as it was envisaged in Rule 6(b) of the Valuation Rules, 1975. He referred to the following decisions in support of his contention. (i) Food Specialities Ltd. v. Appellate Collector of Central Excise and Customs, 1983 (33) E.L.T. 331; (ii) Dhrangadhra Chemical Works Ltd v. Collector of Central Excise, Madurai, 1988 (34) E.L.T. 656; and (iii) Graphite India Limited v. Collector of Central Excise, Calcutta, 1995 (78) E.L.T. 17. 4. We have carefully considered the submissions made by both sides with reference to the facts and perused the records. There is no dispute with reference to the addition of profit to t....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....emsp;It is clear from the above Rule that value of the goods which were captively consumed is to be determined based on the cost of production or manufacture including profits, if any, which the assessee would have earned on the sale of such goods. Accordingly, since the goods in question were not sold as such profit earned with reference to the finished product has to be taken into consideration while determining the assessable value of the goods. As can be seen from the records the appellants have furnished their margin of profit in respect of Stable Bleaching Powder for the last 4 years as recorded in the Order-in-Appeal No. 39-C.E./ALLD/87, dated 31-3-1987 which is as follows :- "17.94% during 1979, 0.10% during the 1980-81, 6.97% du....