Interest expenditure, depreciation and profit margin not be taken into consideration for arriving at the cost of production
PrintListen to this Article
Interest expenditure, depreciation and profit margin not be taken into consideration for arriving at the cost of production
C.C.E., Vadodara-I Vs. Nirma Ltd. & Ors. [2015 (11) TMI 605 - SUPREME COURT]
Nirma Ltd. & Ors. (“the Respondent”) was engaged in the manufacture of Linear Alkyl Benzene (“LAB”) which was cleared by the Respondent to its sister units located in different places and was also used captively in the same factory where the said LAB is manufactured. The Respondent was paying Excise duty as per Rule 8 of the Excise Valuation Rules. The Department has demanded the differential duty by alleging that costing as done by the Respondent was not in accordance with the method of costing and it resulted in undervaluation and thus, paid lesser amount of duty.
The Department sought to include following three elements of cost for arriving at the cost of production:
- Interest expenditure;
- Depreciation; and
- Profit margin
The Hon’ble Supreme Court has held that in accordance with the Costing Accounting Standard – 4 (CAS-4), interest expenditure, depreciation and profit margin not be taken into consideration for arriving at the cost of production for the payment of Excise duty.
Category : Excise | Comments : 0 | Hits : 296
The scheme of levy and collection of Central Excise duty on articles of Jewellery is as under: (a) The levy and collection of Central Excise Duty is on the manufacture of Jewellery (excluding silver Jewellery, not studded with diamonds, ruby, emerald or sapphire). (b) It is applicable to both branded as well as unbranded Jewellery. (c) The rate of duty on the Jewellery are as follows: (i) 1% on transaction value [without Cenvat credit on inputs and capital goods...
Clarifications on Excise imposed on Jewellery The strike by bullion traders and jewellers continued for the 8th day to protest the Budget proposal to impose one per cent excise duty(without input tax credit) on Jewellery, despite the Centre's assurance that it would look into the issue. Most Jewellery houses are closed since the finance minister Arun Jaitley in his Budget proposal on February 29 levied 1% excise duty on Jewellery. Striking associations in different part of the country h...
Dear Professional Colleague, No bar on admissibility of Cenvat credit either as Inputs or Capital goods at any stage of proceedings We are sharing with you an important judgment of the Hon’ble CESTAT, Kolkata in the case of Tata Steel Ltd. Vs. Commissioner of Central Excise, Jamshedpur [(2016) 66 taxmann.com 76 (Kolkata - CESTAT)] on following issues: Issue: Whether rails and other track materials, namely, sleepers, paints and crossings etc. used for movement of raw materials, finish...
Cenvat credit admissible on services of sales commission agent Background: Even though the definition of ‘input services’ given under Rule 2(l) of the Cenvat Credit Rules, 2004 (“the Credit Rules”) covers the services of sales promotion in its inclusive part, eligibility to avail Cenvat credit on the services rendered by a commission agent has been disputed recently because of divergent judgments and views of the Department. In this regard, the Hon’ble Punjab &...
Cenvat credit on input services availed prior to initiation of manufacturing activity is admissible Shree Cement Ltd. Vs. Commissioner of Central Excise, Jaipur [2015 (63) taxmann.com 151 (New Delhi - CESTAT)] Facts: The Department denied the Cenvat credit on the ground that Shree Cement Ltd. (“the Appellant”) is not entitled to take Cenvat credit on Service tax on cargo handling service which has been distributed to the...
Comments