Per K.C. Mamgain : These (03) three appeals filed by M/s. ITC Ltd., Bangalore against the Orders-in-Appeal No. 704/2001-CE dated 31.10.2001 and 548/2002-CE dated 23.09.2002 (by this order two adjudication orders No. 22/2001 dated 28.9.2001 and No. 21/2001 dated 26.07.2001 were decided) passed by the Commissioner of Central Excise & Customs (Appeals), Bangalore. Since the issue involved in these three appeals is common, therefore, these were taken up together for hearing and are being disposed of by this common order.

2. The facts in brief are that the appellants are manufactures of slides and inner frames falling under chapter sub-heading No. 4823.90 and Aluminium inner frames falling under chapter sub heading No. 7607.30 of the Central Excise Tariff Act, 1985. They have filed price declaration under Rule 173C of the Central Excise Rules, 1944 in respect of these goods manufactured and captively consumed in their factory for packing of cigarettes and have declared the value under Section 4 arrived at by cost construction method by enclosing Chartered Accountant Certificate certifying the cost of material. It was found from the price declaration filed from 1995-96 onwards on cost construction method under Rule 6 (b) (ii) of Central Excise Valuation Rules, 1975, they have not included the element of indirect overheads and margin of profit that should have been arrived at. Therefore, all these price declarations were provisionally assessed under Rule 9B of Central Excise Rules, 1944, from time to time and on furnishing the final cost audit certificates showing cost of production. It was noticed that they have not taken into account the element of interest charges incurred on machines purchased for the slide making department and that they have also not included the margin of profit that should have been arrived at based on the price Circular No. 258/92/96-CX. dated 30.10.96 (F.No. 6/28/94-Cx.1) [reported in 1996 (17) RLT M37]. Therefore, Show Cause Notices were issued to them proposing to re-determine the assessable value by including the interest charges during 1996-97 and 1997-98 and margin of profit as worked out on the basis of guidelines of the Board Circular No. 258/92/96-CX. dated 30.10.96 by using the formula -

and accordingly differential duty was demanded. The show cause notices issued were decided by the Deputy Commissioner and the provisional assessments were finalized for the period 1995-96 to 1999-2000 by including the interest charges incurred towards the Mark Andy Flexographic Printing Machine & Partoria Machine, used in the slide making department as part of the overhead expenditure to arrive at the assessable value and the margin of profit was added at the rate of 21.7054%, 25.22%, 34.66% and 36.395% respectively for the years 1995-96, 1996-97, 1997-98 and 1998-99 and provisional assessments were ordered to be finalized accordingly. For assessment for the period 1999-2000, the margin of profit 36.395% is accepted. The Commissioner (Appeals) in his orders has rejected the appeal filed by the appellants.

3. Shri R. Sasidharan, Ld. Sr. Advocate along with Smt. L. Maithili, Ld. Advocate appeared on behalf of the appellants. Ld. Sr. Advocate pleaded that slides and inner frames are not excisable. For excisability of the goods, twin tests are to be satisfied whether it is a manufactured product and whether it is a marketable product. It is for the department to establish this for charging duty. He relied on the Hon'ble Supreme Court decisions in case of-

(i) Metlix (I) Pvt. Ltd. Vs. CCE, New Delhi - 2004 (61) RLT 259 (SC)=2004 (165) ELT 129 (SC)

(ii) Union of India Vs. Ahmedabad Electricity Co. Ltd. - 2003 (59) RLT 119 (SC)=2003 (158) ELT 3 (SC)

(iii) CCE, Hyderabad Vs. Bakelite Hylam Ltd. - 1997 (19) RLT 203 (SC)=1997 (91) ELT 13 (SC)

He pleaded that slides and inner frames are not capable of being sold. The Appellate Authority has erred in relying upon a two members bench