M/S EICHER TRACTORS Vs. CCE, JAIPUR

JUDGEMENT

(1.) IN these two appeals, filed by M/s Eicher Tractors, the issue involved is the determination of assessable value of the excisable goods captively consumed by them.

(2.) HE also contended that in a situation where profit margin for intermediate goods is not available, the profit margin earned on the final product can be adopted after making suitable downward adjustments, for determination of the assessable value of the intermediate products. Reliance is placed on the decision in the case of National Litho Press Vs. CCE, Madurai, : 1997 (91) ELT 140 (T) and CCE, Rajkot Vs. Tata Chemicals Ltd., : 1998 (98) ELT 478 (T). He, further, mentioned that in the present matters the department had taken the profit margin earned on the sale of the tractors without making any adjustments whatsoever and added to the cost of manufacture of intermediate goods; that considering the ratio of these two cases, the department should have applied a lower profit margin than what has been applied for arriving at the assessable value of the intermediate goods; that thus no further addition is required to be made to the value of the goods; that as held by the Tribunal in Hind Lever Chemicals Ltd. Vs. CCE, 2001 (42) ELT 600, cost of transportation from the factory of manufacture to the factory of consumption of the same manufacture is not to be included in the value of goods determined under Rule 6 (b)(ii). Finally the learned consultant submitted that it has been settled by the Larger Bench of the Tribunal in the case of Raymonds Limited Vs. CCE, Aurangabad,, 2000 (12) ELT 327 that profit made by a manufacturer from sale of other manufactured profits has not relevance to determination of assessable value under Rule 6 (b)(ii) with respect to goods meant for captive consumption; that accordingly, the profit on the sale of agricultural tractors cannot be taken into account for the purpose of computation of assessable value of I.C. engines, that the profit to be adopted for the purpose of computation of assessable value under Rule 6 (b)(ii) has to be projected profit.

(3.) COUNTERING the arguments, Shri P.K. Jain, learned SDR submitted that the appellants while computing the cost of manufacture of I.C. engines, only the cost of production was taken and the selling and distribution expenses of the appellants were not added into the cost; once these expenses were not added into the cost of production of the intermediary goods, the same method should have been adopted while working out the margin of profit of the appellant, that is the element of 'selling and distribution expenses' should have been excluded from the total expenses to arrive at gross profit; that two different norms cannot be adopted by the appellants; that two different norms cannot be adopted by the appellants; it these expenses are not taken into consideration, the margin of profit will consequently increase and the appellants would be liable to pay more duty of excise.