TaxTMI 
TaxTMI 
2013 (3) TMI 188
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....ngaged in the manufacture of yarn and man-made fabrics chargeable to excise duty under Chapter 55 of the Schedule to the Central Excise Tariff Act, 1985. Respondent was using yarn manufactured in its spinning division for captive consumption for manufacture of fabric and also selling part of the yarn produced to independent buyers. 3. During the financial years 1998-99, 1999-2000 and 1-4-2000 to June 2000, the appellant cleared the yarn manufactured in the spinning division for captive consumption on payment of excise duty as per ex-factory sale price wherever the said price was available. However, in certain cases, where ex-factory price of the yarn as on date was not available the appellant cleared yarn for captive consumption on payment....
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....ing spinning division and weaving division. 5. Being aggrieved of above referred orders in original the respondent preferred three separate appeals challenging final valuation and confirmation of differential excise duty. Commissioner (Appeals) vide common order in appeal dated 22-12-2005 decided the above referred three appeals and modified the impugned orders in original to the effect that for arriving at the valuation under Rule 6(b)(H) of the relevant Rules only the profit margin of spinning division is to be taken into account and not profit margin of entire factory of the respondent. He thus allow the appeals with consequential relief to the respondents. 6. Shri I. Baig, ld. AR for Revenue has taken us through the common order in ap....
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....ed on the basis of cost of production of such product plus reasonable profit which the assessee would have made on such product. Ld. Counsel further submitted that Commissioner (Appeals) has allowed the appeals preferred by the respondent against respective orders-in-original. 8. We have considered the rival contentions and perused the material on record. In order to properly appreciate the contentions of the parties, it would be useful to have a look on Rule 6(b)(ii) of the Central Excise (Valuation) Rules, 1975 which read thus :- "6(b)(ii) if the value cannot be determined under sub-clause (i), on the cost of production or manufacturing including profits, if any, which the assessee would have normally earned on the sale of such goods." ....
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....)(ii) the following steps are to be followed :- (i) The cost of production of the goods has to be determined so as to include inter alia, the cost of material, labour cost and overheads including administrative cost, advertising expenses, depreciation, interest etc. (ii) Profit before tax has to be taken from audited balance sheet of the previous year and the profit margin has to be calculated as a percentage of cost of production in the previous year as per the formula prescribed by the Cost Accounts Branch of Department of Expenditure (copy enclosed). (iii) The profit margin of the previous year as arrived at step (ii) as a percentage of cost of production has to be loaded to the cost of production of the impugned goods derived at (i) ....
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.... E.L.T. 327 (T-LB) wherein the Larger Bench after analyzing the relevant provisions of Valuation Rules as also the instructions of the Board came to the conclusion that for the purpose of valuation of intermediate product used for captive consumption where comparable market value is not available, only relevant factor is the cost of manufacture or production of intermediate product plus reasonable profit the asseseee would have normally earned on sale on such intermediate product. We find no reason to differ with the aforesaid view. Ld, AR for Revenue has taken a plea that above referred finding of the Larger Bench is no more good law as the aforesaid order of the Larger Bench has been set aside in appeal by the Hon'ble Supreme Court in the....