ITC LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) BOTH these appeals arising from two separate impugned orders were heard together and are taken up for decision by this common order.

(2.) APPEAL No. E/358/99. The appellants are engaged in the activity of manufacture of printed shells, slides, Hinge Lid Cutouts and Cardboard/Foil Board outers in their factory. The dispute arises on the classification of these products. In the present appeal, however, the appellants dispute the classification of HLCs and CBOs backed with aluminium foil which according to them should fall under sub -heading 7607.30 of the Schedule to CETA 1985 and as against that the Department wants the item to be classified under sub -heading 7616.90. The second item which is now in dispute is Coated Board which according to the appellants is classifiable under sub -heading 4810.10 and according to the Department, it is classifiable under sub -heading 4810.90 of the same Schedule. Apart from this, determination of the value under Section 4 of the C.E. Act, 1944 is also the subject matter of this appeal. It so happened that while finalising the assessment, the Assistant Commissioner decided the classification of the disputed products as well as the value under Rule 6(b)(ii) of the Valuation Rules. We may mention that resort to valuation rules itself is necessitated by the fact that the products in question are not sold to any outsiders but are captively consumed by another unit of the appellants. The fact that the products are captively consumed is not in dispute and therefore the applicable rule is Rule 6(b)(ii) of the Valuation Rules. However, the dispute arose on various elements which have been considered by the lower appellate authority for inclusion in the cost of production. We would now deal with the issue pertaining to valuation and then move on to classification of the products.

(3.) THE Commissioner (Appeals) in the impugned order dealt with the issue of valuation under Rule 6(b)(ii) in the following manner :