TaxTMI 
TaxTMI 
2018 (5) TMI 1448
X X X X Extracts X X X X
X X X X Extracts X X X X
....ased on the assessable value worked out on the basis of valuation principles laid down by Hon'ble Supreme Court in the case of Pawan Biscuits Co. (pvt. Ltd.)-2000 (120) ELT 24 (SC)i.e. on the basis of cost of raw materials supplied by GSK plus job work charges paid by GSK. M/s GSK manufacturers the raw materials at its different factories and supplied them to the appellants by paying excise duty based on Rule 8 of the Valuation Rules viz. Cost of production plus10%. As the cost of production of the raw materials manufactured by GSK was not known at the time of their removal and the same was getting finalized after the end of Accounting year only, the assessment of GSK were kept provisional by the excise authorities having jurisdiction over the factories of GSK. Thus, during the period of dispute, GSK was paying excise duty on provisional cost of production of raw materials. As the cost of production of raw materials was provisional at the end of GSK, the assessment at the end of the appellants were also kept provisional by the departmental authorities. In view of the same, the appellants requested the department to allow the appellant to clear Boost by assessing the same on provisi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he case, CESTAT vide order No.. 451/07-EX dated 03.08.2007 set aside the aforesaid order-in-Appeal dated 31.01.2007 and remanded the case back to Commissioner (Appeals) for a decision on merits. The appellants were afforded an opportunity of personal hearing by the Commissioner (Appeals)on 29.09.2008 during which the appellants made detailed submissions before the Commissioner (Appeals) both on facts & law. However, without appreciating the submissions made by the appellant, the ld. Commissioner(appeals) vide order-In-Appeal No. 863/CE/Appl/JAL/2008 dated23.12.2008 has arbitrarily proceeded to uphold the determination of value of Boost @ Rs. 83.17 per kg. as finally assessed by the original Adjudicating Authority, on the premise that there were five kinds of raw materials which were being received on provisional price whereas the appellants had submitted cost data in respect of only three raw materials and that cost of production of the impugned goods Boost submitted by the appellants did not appear to be complete and correct. Aggrieved from the said order, the appellant is before us. 3. The ld. Counsel for the appellant submits that the appellant has correctly determined assess....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... C.B.E. & C. Circular No.692/8/2003-CX, dated 13-2-2003 - It does not include loading of notional amount of 15%/10% to cost of production of raw material, as mandated by Rule 8 of Central Valuation(Determination of Price of Excisable Goods) Rules, 2000 for remittance of Excise duty by transferor unit - For transferee unit, which used goods for further manufacture, this loading cannot constitute procurement cost of raw material manufactured by transferor unit - Contrary view in TISCO [2014 (300) E.L.T. 571(Tribunal)], overruled as per incuriam and erroneous - Final Order No. 542/2010, dated 11-5-2010 by CESTAT, Chennai in Eveready Industries and 2011 (274) E.L.T. 564 (Tribunal)approved. - In the case of Inter-unit transfer of goods for captive consumption, the actual cost of production (100% of the cost of production), of the raw material procured from the Bhadrachalam unit of the appellant (excluding the notional loading under Rule 8- 15%/10%] is the cost of raw material in the hands of the Chennai unit, for determining the cost of production of packaging material manufactured by the Chennai unit. The percentage of loading on such cost of production, mandated by provisions of Rule ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f production of billets". This conclusion does not follow either from the text or intendment of Rule 8. Rule 8 clearly mandates and in the context of those facts that since wire rods are not sold by the Mumbai unit of TISCO but are used for consumption by TISCO (at Borivali) for production or manufacture of other articles, the value [for remittance of excise duty] shall be 110% (115% during the earlier period up to 4-4-2003) of the cost of production of manufacture of wire rods. Neither textually not on legitimate inferences from the context of Rule 8 does it follow that the value (for remittance of excise duty) on wire rods is mandated to be 110% (or 115%, as the case may be) of "value" of production or manufacture of such goods. The loading of the specified percentage for the remittance of excise duty is not on the excisable value of the raw material but on the cost of the raw material which goes into the cost of manufacture of wire rods by the second (Mumbai) unit for stock transfer to the third (Borivelli) unit of the same entity. This in our respectful view is the fallacy in the reasoning in TISCO judgement. In pars 6.2, the conclusion "as already discussed above the value of ....