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CUSTOM EXCISE & SERVICE TAX APPELLATE TRIBUNAL, MADRAS
MS. JYOTI BALASUNDARAM, Dr. Chittaranjan Satapathy, JJ.
Commissioner of Central Excise, Pondicherry -Appellant
Versus
EID Parry (I) Ltd. -Respondent
Final Order No. 846/2010 Appeal No. E/645/2004, 846 of 2010, E/645 of 2004
Decided On : 03-08-2010
A.B. Niranjan Babu,S. Muthuvenkatraman
Ms. Jyoti Balasundaram, Vice-President - The respondents herein are manufacturers of sugar, molasses, denatured spirit and carbon dioxide. Show-cause notice was issued alleging that the assessees, while arriving at the cost of manufacture of denatured spirit, were adopting the price of molasses at which it was billed to unrelated buyers as the cost of molasses, instead of adopting 115% of such cost of molasses captively consumed as per Rule 8 of the Central Excise Valuation Rules, 2000 and accordingly undervalued the denatured spirit. Besides, the following three elements were also included to arrive at the duty liability namely :-
(1) Administration Fee of Rs.1/- per Litre of spirit paid to the State Govt.
(2) Selling & Administration expenses & interest charges and
(3) Loading of molasses price by 15% and another 15% of the value of denatured spirit.
The adjudicating authority, while accepting that in terms of CAS-4 selling and administration expenses and interest are not includible in the assessable value, held that costing as laid down in CAS-4 was not required to be adopted by the assessees for the reason that CAS-4 itself was introduced only w.e.f. 13.2.2003 and not from July 2000 and therefore not applicable for clearances prior to 13.2.2003. The Commissioner (Appeals) set aside the impugned order loading the value of molasses by 15% and including the element of selling and administration expenses in the cost of manufacture; hence this appeal by the Revenue.
2. We have heard both sides. The only contention of Revenue in this appeal is that CAS-4 has only prospective effect and cannot be applied retrospectively so as to cover clearances during the period prior to 13.2.2003. However, we find that in the case of Arti Industries Ltd. Vs. CCE, Vapi [2005 (69) RLT 828 (CESTAT-Mum.)=2005 (186) ELT 208] and Ashima Denims Ltd. Vs. CCE, Ahmedabad [2005 (191) ELT 318], it has been held that CAS-4 costing principles can be adopted retrospectively.
3. Following the ratio of the above decisions, we see no warrant to interfere with the impugned order and accordingly uphold the same and dismiss the appeal.
