KALYANI FOODS Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) This appeal arises from Order -in -Appeal No. 118/01 Dated 24.10.2001 by which the Commissioner (Appeals) has confirmed the Order -in -Original and has held that duty of Rs. 3,14,199/ - is rightly demandable from the party. It is the appellants' case that they are engaged in the manufacture and supply of the biscuits (falling under Chapter Heading No. 1905.11) to customers on job work basis. There were four demand notices issued on 23.4.98, 27.8.98, 31.12.98 and 4.5.99 for the period from October 1997 to February 1999 totally demanding amount of Rs. 3,14,199/ -. The Department held that the incidence of modvat credit of duty on the inputs received by the appellants should be added to the assessable value of the final products namely biscuits. The appellants relied on the judgment rendered in the case of CCE Vs. Dai Ichi Karkaria Ltd (1999 (112) ELT 353) referring to the determination of assessable value of intermediate product captively consumed in the manufacture of final product in terms of Sec. 4(1)(b) of Central Excise Act read with Rule 6(b)(ii) of the Central Excise rules. However, the Commissioner has distinguished the judgment and held that the same is not applicable. It is the grievance of the appellants that the judgment of the Apex Court is not distinguishable. The appellants contend that they had not claimed any abatement and the non -inclusion of the duty paid on the inputs availed as credit will not amount to abatement of value on value of final product as held in the impugned orders. They rely on Para 12 of the judgment of the Hon'ble supreme Court and contend that the conclusion arrived by the Apex Court clearly apply to the facts of this case.

(2.) We have heard Ld. Counsel Shri K.P. Jagadeesan and Ld. DR Shri B.R. Jagadish.

(3.) Ld. Counsel submits that the issue being fully covered in terms of the Apex Court judgment, therefore, the demands confirmed is not sustainable and is required to be set aside.