2002 (2) TMI 421

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....approved based on its cost of production without allowing the exclusion of various elements like profits, administrative overheads and Modvat credit on inputs. This issue came earlier before this Tribunal and the Tribunal remanded the matter for reconsideration in the light of the judgment of the Apex Court in the case of Dai Ichi Karkaria Ltd. v. CCE, Pune [1996 (81) E.L.T. 676]. In the remand proceedings, the lower authorities granted relief in respect of Modvat credit on inputs. In the present appeals, the assessee persists with their claim for relief in respect of the other items. Penalties imposed in the impugned orders are also a cause for the present appeal. 3. When the appeals were taken up together for hearing, the learned ....

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....ut that elements like interest, profit and administrative overheads, as attributable to the product under costing, are rightly to form part of the cost of production. He submitted that the appellants' own Cost Accountant had included these elements while working out the cost of production. The Central Excise Authorities have not made any addition whatsoever. These elements form a part of cost of production according to the generally accepted principles of costing. The ld. SDR also pointed out that the decision of the Tribunal in Hindustan Tyres Pvt. Ltd. case does not support exclusion of administrative overheads from cost of production. 4. Expenditure towards interest and administrative overheads form a part of cost of manufacture.....

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....it in the appellants' grievance. The appellant was required to be given appropriate relief consequent to the reduction of duty demand. However, this has not taken place. Further, from Appeal E/1730/2001 it is seen that penalty amount has been increased in the remand proceedings. This was clearly not permissible. When the matter had been remanded for a fresh decision pursuant to an appeal filed by the assessee, it was not legally permissible to pass an order enhancing the penalty placing the appellant in a more disadvantageous position than he was under the first order. Yet another anomaly in these orders is that penalties bear no relation to the duty demands involved. In appeal E/1206/2001 duty confirmed is about Rs. 41 lakhs and penalty im....