ITC Limited Vs Commissioner of GST & Central Excise (CESTAT Chennai)
CESTAT Chennai held that in 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
Facts- The point for consideration before the Commissioner is whether or not the value of paper received from Bhadrachalam Unit is 115%/ 110% of cost of production or just 100% in the hands of appellants.
Conclusion- We find that the legal issues dealt with in the impugned order have already been decided by this Tribunal, for the earlier period, in Final Order No 40094/2023 28/02/2023. Wherein, it was held that 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 8 for remittance of excise duty by the Bhadrachalam unit cannot not however be considered as comprised in the cost of the raw material consumed for manufacture of packaging material and thus constituting the cost of production at the Chennai unit.
Held that it has not been brought to our notice that the said Final Order, which pertains to the past period, has been either varied, modified or set aside as of date. Hence, we find no reason to deviate from the same for demands pertaining to the subsequent period.
FULL TEXT OF THE CESTAT CHENNAI ORDER
These appeals are filed by M/s. ITC Ltd. against Order-in-Appeal No. 183, 184 and 185/2016 (CXA-I) dated 20.9.2016 passed by the Commissioner of Central Excise (Appeals – I), Chennai.
2. The impugned order deals with three Orders-in-Original pertaining to the appellant as detailed below.
