TaxTMI 
TaxTMI 
2005 (8) TMI 235
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.... sister unit at Patiala. The issue is valuation of the above goods in terms of Rule 6(b)(ii) of the Valuation Rules, 1975. Both the lower authorities relied on the Board's Circular No. 258/92/96-CX, dated 30-10-1996 and included the profit margin of the final products in the cost of the semi-finished piston rings in order to arrive at the assessable value. The appellants' contention is that profit margin required to be included should be only a notional profit margin and not the profit margin earned on the final products. The lower authorities adjudicated their case for different period from September 1997 to September 1999 and demanded differential duty of Rs. 5,89,722.00. The Commissioner (Appeals) upheld the lower authority's order. (....
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.... of the final/end-products. (ii) The Tribunal in the case of Dharangadhara Chemicals Works Ltd. [1988 (35) E.L.T. 202 (Tri.) = 1988 (17) E.C.R. 477 (Tri.)] has held that the assessable value of the captive consumption items has to be computed by the method of cost accounting, delinked from the margin of profit of the end-product. Similar rulings were held in the following cases:- (1) CCE v. Festo Elgi Pvt. Ltd. [1998 (98) E.L.T. 617 (Tri.)] (2) Groz Beckert's case [1998 (101) E.L.T. 512] (iii) For the semi-finished piston rings sent to the appellant's Patiala unit also, there is no comparable ....
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....:- (a) E/37/2003 In the case of Festo Elgi Pvt. Ltd. [1998 (98) E.L.T. 617 (Tribunal)] cited by the learned Advocate, the price list declared as assessable value has sum total of the cost of raw material, manufacturing cost and 10% of marginal profit. This was not accepted by the Department. But the Tribunal observed that the gross profit margin earned on the final product cannot be mechanically applied to captively consumed items without considering the various factors. The Division Bench of the Hon'ble High Court of Karnataka in the Writ Appeal Nos. 771 & 772/1989 has held as follows:- "We are entirely in agreement with the view taken by the learned Single Judge to the effect that in respect of nuts, bolts, screws and cutting too....
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....th appellate authority, the lower authority's action of appropriating the refund sanctioned is irregular. No Show Cause Notice was also issued before such an action. In view of the foregoing, I pass the following order: 1. I uphold Order-in-Original No. 87/2000-C.E., dated 27-12-2000 passed by lower authority and reject the appeal bearing No. 36/2001 filed by the appellants. 2 In view of my decisions to reject the appeal filed against the Order No. 87/2000-C.E., appeal bearing No. 129/2001 becomes infructuous." In our view, the action of the Original Authority is not proper when the appeal in the same case was pending, he could not have appropriated th....