2011 (2) TMI 1050

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....turers of drugs and pharmaceuticals in bulk and consumed the same in the  manufacture of formulations at their sister units located elsewhere in the country. Since the goods were captively consumed, the respondent was valuing the said goods based upon the cost of production plus profit. The disputed period in this case is January 2001 to December 2001, wherein the respondent while arriving at assessable value of the intermediary product consumed by them, determined the cost of the product and submitted a Chartered Accountant's certificate. It is the case of the Revenue that the advertising cost, interest, marketing distribution expenses and other administrative expenses are required to be included in the cost of the production of the s....

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.... it is quite clear that the cost of production of captively consumed goods effected after 13.2.2003 will have to be done in accordance with CAS-4 whereas in the instant case the captively consumed goods in respect of which the cost of production was undertaken was for the period January 2001 to December 2001. Therefore the Commissioner (Appeals) has erred in applying the Circular No. 692/08/2003-CX dated 13.2.2003 in the instant case.  The Supreme Court in the case of H.M. Bags Manufacturers v. Collector of Central Excise - 1997 (094) ELT 3 (S.C.) has held that 'the effective date for the date of issuance of trade notice, must be held as the effective date for raising the demand and cannot be prior to that. This conclusion is reinforce....