Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, Pune-I vs M/S. Bajaj Auto Ltd, Pune on 26 September, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. II APPEAL NO. E/2912/02 E/CO/21/03 [Arising out of Order-in- Appeal No. PI/267-269/02 dated 26-4-2002 passed by the Commissioner(Appeals), Central Excise, Pune-I ] For approval and signature: Honble Mr Ramesh Nair, Member(Judicial) Honble Mr. C.J. Mathew, Member(Technical) =======================================================
1. Whether Press Reporters may be allowed to see : No
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the :
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : seen
of the Order?
4. Whether Order is to be circulated to the Departmental: Yes
authorities?
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Commissioner of Central Excise, Pune-I
:
Appellant
VS
M/s. Bajaj Auto Ltd, Pune
:
Respondent
Appearance
Shri. Ajay Kumar, Jt. Commissioner(A.R.) for the Appellants
Shri. V.K. Godbole, General Manager for the Respondent
CORAM:
Honble Mr Ramesh Nair, Member(Judicial)
Honble Mr. C.J. Mathew, Member(Technical)
Date of hearing: 26/9/2016
Date of decision: 23/1/2017
ORDER NO.
Per : Ramesh Nair
The fact of the case is that respondent engaged in the manufacture of parts of motor vehicles, jigs, fixtures, tool dies, moulds, patterns etc. During the period 1-4-1998 onward, they supplied said goods to their other units for captive use in the manufacture of final product or to their vendors/ job-workers on loan basis by filing price declarations in proforma II (2)(b) and declaring assessable value on the cost construction basis. The proceedings were initiated by the department and contended that for arriving at assessable value on cost construction basis the element of marketing expenses should be added. The respondent being aggrieved by the Order-in-original filed appeal before the Commissioner(Appeals) who allowed the appeal of the respondent holding that for the purpose of valuation under Rule 6(b)(ii) of Central Excise (Valuation) Rules, 1975/Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods), 2000 marketing expenses is not includible. Being aggrieved by the Commissioner(Appeals)s order Revenue filed this appeal.
2. Shri. Ajay Kumar, Ld. Jt. Commissioner(A.R.) appearing on behalf of the Revenue reiterates the grounds of appeal.
3. On the other hand, Shri. V.K. Godbole, Ld. General Manager appearing on behalf of the Respondent submits that issue is no longer res integra as this Tribunal in their own case on the same issue decided the matter in their favour vide Order No. A/1720/WZB/2005/C-III/EB dated 24-10-2005 and Order No. A/42-44/06/WZB/C-II/EB dated 28-11-2005 therefore present proceedings of Revenues appeal does not survive.
4. We have carefully considered the submissions made by both sides and perused the record.
5. We find that issue is whether marketing expenses should be includible in the assessable value of excisable goods arrived at on cost construction basis or otherwise. This Tribunal consistently vide final Order No. A/1720/WZB/2005/C-III/EB dated 24-10-2005 and Order No. A/42-44/06/WZB/C-II/EB dated 28-11-2005 categorically held that marketing expenses is not includible in the assessable value arrived at under Rule 6(b)(ii) of Central Excise(Valuation) Rules, 1975. This Tribunal in the order dated 24-10-2005 passed following order:
Revenue is in appeal. The respondents were issued a show cause notice dtd 14/8/98 asking them to show cause why the valuation cleared for the goods declared as per proforma 11 (2)(b) for captive use in the manufacture of products at their other units or at the units of vendors should not be re-determined by adding gross profit from the Balance Sheet for the year 1997-98 @ 35.27% and by adding element of marktire, expenses @ 3.67% to the cost of production. The Assistant Commissioner confirmed the demands as proposed in the notice. The Commissioner (Appeals) allowed the respondents appeal holding as follows.
i) in respect of calculation of gross profit margin:-assessee calculated correct profit margin by excluding 'other income' and is based on Balance sheet for the year 1997-98
ii) In respect of non inclusion of marketing/advertising expenses relying on the Tribunal decision ! in the case of Mafatlal Industries Ltd (supra), it was held that 'the cost of marketing expenses has nothing to do with the manufacture and hence is not includible in the cost of production determined under Title 6(b)(ii) of the Central Excise (Valuation) Rues, 1975.
Hence this appeal.
Following the decision in the case of Raymonds Ltd vs CCEX Auranaabad 2001 (129) ELT 327 (Tribunal-LB), wherein it has been hcid that profit or loss made by the manufacturer from other activities, be they manufacturer of other goods or trading in other goods, is riot relevant while determining, the assessable value for captively consumed goods. Also finding that Commissioner (Appeals) had applied the case law in case of Mafatlal Industries Ltd vs CCEX 2001 (134) ELT 725 (Tri-Mumbai) & after perusal of the instruction on Valuation in case captively consumed goads has to be seem in accordance with CAS-4 & perusal. Of document issued by the Institute of Cost & Works Accountants of India, we find no reasons to uphold the revenue appeal in this case.
3. Consequently the Revenue appeal is rejected.
As per above decision by this Tribunal in the respondents own case, the issue stood settled therefore there is no substance in the Revenues appeal. The impugned order is upheld, Revenues appeal is dismissed. CO stands disposed of accordingly.
(Order pronounced in court on ________________) C.J. Mathew Member (Technical) Ramesh Nair Member (Judicial) sk 2 E/2912/02