1976 (5) TMI 19

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....mine the cost at the block stage for arriving at the assessable value. The principle which was followed by the department is determining the assessable value was to apportion the total expenditure shown in the balance sheets for different items of work of the company submitted by them under the following four heads :- 1. Direct Cost (relating to the manufacture of U-Foam block). 2. Conversion cost (relating to conversion of U-Foam blocks into finished products). 3. Common costs (representing such expenses as cannot be precisely attributable to any of the foregoing process but incurred in the manufacturing process), and 4. Selling and distribution expenses (relating to sales and distribution of finished product and excise duty). ....

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....s regard that a more accurate proportion should be adopted while allocating the common cost between the direct cost and conversion cost. Regarding the sale and distribution expenses it is observed from the analysis given in the order-in-appeal that the appellate authorities had not applied a uniform and consistent standard while choosing the items of expenditure that will be covered under selling and distribution expenses. For example, in 1965 report the amount spent on Provident Fund and ESI contribution has been shown as part of selling and distribution expenses whereas in the analysis for subsequent years from 1966-67 upto 1968-69 the amounts on this account have not been allocated under the selling and distribution expenses. Similarly, ....