Case Law Details
Hindalco Industries Ltd. Vs Commissioner of Central Excise (Appeals) (CESTAT Kolkata)
The issue under consideration is whether assessee is justified in reducing the assessable value to the actual cost of production in the inter-unit transfer of goods?
In the present case, conversion job was to be undertaken by the Appellant partly through the Taloja Unit of the Appellant and partly through the Belur Unit of the Appellant. The Appellant contends that the Taloja Unit and the Belur Unit paid Central Excise duty in respect of the processes done by them by calculating the assessable value on the basis of the cost of production as contemplated under rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules 2000. The dispute that has arisen for consideration in this Appeal is whether in the case of inter-unit transfer of goods from the Taloja Unit for captive consumption to the Belur Unit, the entire value (i.e. 115% or 110% as the case may be) of the cost of production or the actual cost of production (i.e. 100% of cost excluding the notional loading of 15% or 10%) of the goods, manufactured by the Taloja Unit, would be the cost of the raw material for the Belur Unit of the Appellant for the purpose of determining the assessable value under rule 8 of the 2000 Valuation Rules, for ultimately transferring the goods to the supplier of goods.
CESTAT states that in view of the decision of the larger Bench of the Tribunal in ITC Ltd., it has to be held that the Appellant was justified in reducing the assessable value to the actual cost of production (i.e. 100% of cost excluding the notional loading of 15% or 10% of the goods manufactured by the Taloja Unit) as the cost of raw material for the Belur Unit for the purpose of determining the assessable value under rule 8 of the 2000 Valuation Rules. The order dated September 30, 2009 passed by the Commissioner (Appeals) that has been assailed in this appeal, therefore, cannot be sustained and it is set aside. The appeal is, accordingly, allowed.
FULL TEXT OF THE CESTAT JUDGEMENT
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