CCE Vs. AUTOMOTIVE COACHES AND

JUDGEMENT

(1.) This appeal filed by the Revenue is directed against the order in Appeal No. 37/97 (M)(D) dated 4.12.1997 passed by the Commissioner (Appeals), Chennai. The department has come in appeal on the ground that Modvat Credit of duty paid on the inputs is required to be included in the assessable value of the final product in terms of Section 4 of the CE Act, 1944. In support of their plea they have relied upon the decision in the case of CCE v. Khaitan Fans Pvt. Ltd. wherein it has been held that sale tax or purchase tax paid on the raw materials become part the of price paid for raw materials, hence form part of the manufacturing cost and therefore, they are includible in the assessable value of the final product. In the same analogy Central Excise duty paid on the input should also be included in the assessable value, contends the revenue.

(2.) Heard the learned DR Shri A Jayachandran and Shri R. Raghavan, learned Counsel for the respondent.

(3.) Shri R. Raghvan, submits that the issue is no longer res integra as the same has been decided by the Hon'ble Apex Court in the case of Dai Ichi Karkaria Ltd.v. CCE, Pune . which was on appeal from the decision . The Hon'ble Apex Court in the cited decision held that excise duty paid on raw material if modvated is not to be included in the cost of production of excisable product. The learned Counsel also invited our attention to the decision rendered by the West Regional Bench of the Tribunal in the case of CCE v. Alco Industries reported in 2002 (103) ECR 959 wherein it has been held that Modvat credit is not to form part of the assessable value in the light of the Judgment of the Hon'ble Apex Court in the case of M/s Dai Ichi Karkaria Ltd. (supra).