Case Details: OCL India Ltd. Versus Commissioner of Central Tax, GST & CE, Rourkela (2025) 31 Centax 3 (Tri.-Cal)
Judiciary and Counsel Details
- Ashok Jindal, Member (J) & K. Anpazhakan, Member (T)
- Shri Rahul Tangri, Adv., for the Appellant.
- Shri S.S. Chattopadhyay, Authorised Representative, for the Respondent.
Facts of the Case
The appellant-assessee, a manufacturer of excisable goods, effected clearances of intermediate goods to its sister unit for captive consumption. During the course of assessment, the jurisdictional officer under Central Excise disputed the valuation method adopted by the appellant, asserting that Rule 4 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 was applicable.
The appellant, however, contended that as per C.B.E. & C. Circular No. 692/8/2003-CX, dated 13-02-2003 the cost of production for captive consumption was to be determined in accordance with Cost Accounting Standard No. 4 (CAS-4) issued by the Institute of Cost and Works Accountants of India in terms of Rule 8 of Central Excise Valuation (Determination of Price of Excisable goods) Rules, 2000. It was submitted that the appellant had paid duty as per CAS-4 norms with the requisite 10% margin. The matter was accordingly placed before the Calcutta CESTAT.
CESTAT Held
The Calcutta CESTAT held that valuation of excisable goods cleared to a sister unit for captive consumption was governed by Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. The Tribunal observed that Rule 8 applied to cases of captive consumption and required the cost of production to be computed in accordance with CAS-4, as clarified by C.B.E. & C. Circular No. 692/8/2003-CX, dated 13-02-2003. It noted that the appellant had correctly determined the cost of production based on CAS-4 and included the mandated 10% margin. The Tribunal concluded that Rule 4 had no application in such cases and that the demand raised by the jurisdictional officer under Central Excise was unsustainable. The appeal was allowed in favour of the appellant.
List of Cases Cited
- National Aluminium Company Ltd. v. Commissioner — (2024) 18 Centax 456 (Tri. – Cal.) — Relied on [Paras 8, 14]
List of Departmental Clarification Cited
- C.B.E. & C. Circular No. 692/8/2003-CX., dated 13-2-2003 [Paras 9, 15, 17]
