TaxTMI 
TaxTMI 
TaxTMI 
2025 (5) TMI 1990
X X X X Extracts X X X X
X X X X Extracts X X X X
....999 was amended by Notification No. 18/2008-CE, dated 27.03.2008, inserting a new paragraph 2A in the Notification, allowing the refund of duty payable at a specified rate at 39% of its Value Addition as specified in Sl. No. 8 to the table appended in the notification. The unit may avail at a higher rate of Value Addition at actual rate, in cases where the Actual rate of Value Addition is higher than the specified rate of Value Addition of 39 %. 1.2. As per para 2A of the Notification No. 18/2008-CE, dated 27.03.2008, in order to avail the actual rate of value addition at a higher rate, the Undertaking has to calculate the actual rate of value addition on the basis of the previous year's Audited Balance Sheet by way of a Certificate obtained from the statutory Auditors and to be filed before the Commissioner of Central Excise, who will approve the Value Addition at a higher rate after verification of the documents submitted by the unit for availing the refund under Notification No. 33/1999-CE. The unit may avail the refund at an actual rate of value addition instead of the specified rate of 39 % of the value addition. 1.3. The appellant has applied for a higher rate of Value Addi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the impugned Order in Original dated 26.05.2010 passed by the Ld. Commissioner, Central Excise, Guwahati, is not in accordance with the conditions of notification no. 33/99-CE, dated 08.07.1999 as amended by Notification No. 18/2008-CE dated 27.03.2008. The Ld. Commissioner, Central Excise, has re-calculated the value addition going beyond the scope of Accounting Standards as well as Cost Accounting Standards as prescribed by the Accounting Standard Board of India. Hence, the impugned Order in Original is not sustainable in law and the impugned order is liable to be set aside. 2.2. The ld. Commissioner is not justified to recalculate the value addition on his own without considering the Statutory Auditor's Certificate. As per proviso to paragraph- 2.1(1) of the Notification 33/99-CE, dated 08.07.1999 as amended by Notification No. 18/2008-CE, dated27.03.2008, the Commissioner shall consider the rate of value addition as certified by the Statutory Auditors but cannot re-calculate it on his own. It is submitted that the special rate arrived at as per the Audited Balance Sheet as on 31.03.2008 was 82.29% and not 36.81% as calculated by the ld. Commissioner,. 2.3. The ld. Comm....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cting lower value of raw material consumption by not including the expenditure against Furnace Maintenance, Total Inward Freight and Packing materials. The appellant ought to have deducted the expenditure incurred on calcined petroleum coke since it is a CENVAT able item as well from the sale value. 3.2. The notification No. 18/2008-CE dated 27.03.2008 clearly mentions that "the manufacturer supports his claim for a special rate with a certificate from his statutory auditor containing an estimate of value addition in the case of goods for which a claim is made, based on the audited balance sheet of the unit, for the preceding financial year;" This means that the certificate of the statutory auditor is just an estimation of the value addition, not the ULTIMATE calculation and the same is based on the audited balance sheet of the unit, for the preceding financial year. Further, the said notification also prescribes that "...the Commissioner of Central Excise, after making or causing to be made such inquiry as he deems fit, shall fix the special rate..." This means that the notification does not direct the Commissioner to accept the certificate of the statutory auditor blindfolded an....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Silicon Ferro Slag 107.11 3.44 Total 110.55 F. Sale Value of Production Ferro Silicon Ferro Slag 4710.60 40.01 Total 4750.61 G. Raw Material & other input Consumed - Raw Material consumed 899.45 Less: Raw material consumed on by-product & Ferrous waste 65.35 Raw material consumption on Ferro Silicon 834.09 H. Cenvatable fuel consumed NIL I. Cenvatable packing material consumed NIL J. Total Raw Material and other input consumed for manufacturing Ferro Silicon 834.09 K. Value Addition: (a) Sale Value of production of Ferro Sticon as calculated above 4710.60 (b) Less: raw Material and other input consumed for production of Ferro Silicon 834.09 (c) Value Addition 3876.51 (d) % of value addition on (a) above. 82.29 5.3. The special rates representing actual value addition in respect of Ferro Silicon falling under chapter 72 manufactured by the applicant, determined by the Ld. adjudicating authority is as under: Particulars Ferro Silicon Chapter 72 Gross Sales 50,76,20,090 Excise Duty 7,09,76,588 Sale Value excluding excise duty, sales tax VAT ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... government are not includable to arrive at the total cost of freight. 5.7. We find that as per para 5.1.9 of CAS-6. Of the Cost Accounting standards on material cost, any subsidy received by the appellant is not includable in to arrive at the material cost. For ready reference the para 5.1.9 of CAS-6 is reproduced below: Subsidy/Grant/Incentive and any such payment received/receivable with respect to any material shall be reduced from cost for ascertainment of the cost of the object to which such amounts are related. 5.8. Thus, we find that as per para 5.1.9 of CAS-6. the freight subsidy received by the appellant is not includable to arrive at the total freight which is to be added for arriving at the cost of material. However, we observe that the Ld. adjudicating authority has included this subsidy and arrived at the freight cost as below: Details of freight charges: Particulars (Amount in Rs.) Amount (Rs.) Freight on M.S. Scraps/Mill Scale Less: Central Transport Subsidy 1958758.00 969742.00 989016.00 Freight on Quartz Less: Central Transport Subsidy 71545906.00 60510935.00 11034971.00 Total: 12023987.00 5.9. In view of the above, we hold that the freight s....