2025-VIL-1967-CESTAT-KOL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise – Rule 8 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 – Clearance of goods – Demand of short-paid duty – Dropping of demand – Respondent is engaged in manufacture of rolled products of Aluminium – Revenue alleged that Respondent had undervalued assessable value of their excisable finished product cleared to their sister units – On basis of said allegation, department issued show cause notice proposing to demand short paid excise duty from Respondent – Additional Commissioner confirmed demand as proposed in show cause notice – Commissioner (Appeals) dropped demand confirmed in Order-in-Original – Whether cost of production as per CAS-4 adopted by Respondent has to be arrived at on basis of actual cost of inputs, fabrication, etc. or on basis of notional transfer price adopted by Respondent for its internal profitability assessment of units – HELD – Respondent’s Cas-4 value is based on actual landed cost of materials/inputs as well as actual fabrication cost and other manufacturing costs which have been incurred by Respondent and it does not include any notional values. CAS-4 value arrived at is increased by 10% as per mandate of Rule 8 of the Rules to arrive at assessable value. Revenue seeks to treat notional transfer price as costs to arrive at CAS-4 value. Transfer price recorded in books of accounts of units should not be adopted as cost of raw material for purpose of CAS-4 certificate, in as much as, such price is only a notional value for internal accounting purposes and such notional value is neither recorded nor its impact is captured in financial statements of Respondent. Impugned order passed by lower appellate authority is affirmed – Appeal dismissed
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