Customs, Excise and Gold Tribunal - Delhi
C.C.E. vs Haryana State Electricity Board on 2 August, 1999
Equivalent citations: 2000(67)ECC273
ORDER V.K. Agrawal, Member (T)
1. The issue involved in this appeal filed by the Revenue is whether the notional profit 10% is to be added in the assessable value of goods captively consumed when the Respondents M/s Haryana State Electricity Board is incurring loss as per balance sheet.
2. Shri P.K. Jain, Ld. S.D.R. submitted that H.S.E.B. is showing loss in their audited Balance-Sheet in respect of generation and distribution of electricity and not in respect of the goods which are manufactured and captively consumed and accordingly the Notional Profit as per the provision of Rule 6(b)(ii) of the Central Excise (Valuation) Rules has to be added in the assessable value. He also relied upon the decision in the case of Apollo Zipper Company (P) Ltd. v. C.C.E., Calcutta . He finally submitted that if an assessee is having more than one unit, the Profit and Loss of the unit which is making the goods which are captively consumed is only to be taken into consideration.
3. Shri J.P. Kaushik Ld. Advocate, submitted that the matter has been decided by the Appellate Tribunal in the case of P.CC. Pole Pilot v. C.C.E., Chandigarh 1998 (26) RLT 639 in which it was held that the assessable value has to be determined on the basis of the audited Balance Sheet. He also referred to the Order, dated 31.12.93 issued by the C.B.E.C. under Section 37(B) of the Central Excise Act. According to this Order, for the purpose of assessment of goods captively consumed the value should be arrived at by adding the previous year's gross profit, if any, of the assessee as per their audited balance sheet. The Ld. Counsel submitted that the audited balance sheet shows loss as such there is no question of adding any profit to the assessable value.
4. We have considered the submissions made by both the sides. Rule 6(b)(ii) of the Central Excise (Valuation) Rules provides that where the excisable goods are sold but are used or consumed captively, the value shall be based on the cost of production or manufacture including profits, if any, which the assessee would have normally earned on the sale of such goods. It is not in dispute that the audited balance sheet of the Respondents had shown loss incurred by them. The profit has to be added to the assessable value of the captively consumed goods if it has been earned by the company. As the audited balance sheet is showing the loss the question of adding any profit notional or otherwise in the assessable value does not arise. This was the view taken by the C.B.E.C., in the order issued under Section 37B of the Central Excise Act. Similar views were held by the Tribunal in the case of P.C.C. Pole Pilot referred to above. The profit of single activity undertaken by the Respondents cannot be worked out individually as the same is not sold in the market and the total position of the Respondent is reflected in audited balance sheet. In view of the facts we do not find any reason to interfere with the impugned order and reject the appeal filed by the Revenue.