Excise

Valuation

— Intermediate products — Captive consumption — Applicability of principles of accountancy — Milk crumbs and refined milk chocolate manufactured and captively consumed to manufacture the final product, namely, chocolate in the factory of the manufacturer — The said intermediate products neither sold nor marketable — In such circumstances, applying the principles of accountancy, held, expenses of the factory in producing the final product, such as labour cost, direct expenses, total factory expenses, administration expenses, travelling expenses, insurance premium, advertising expense and interest, not includible in the value of the said intermediate products — CAS-4 formulated by ICWAI for determining cost of production for captive consumption, having been applied consistently by CESTAT in various decisions which were never challenged by the Department, held, the Department could not thereafter take a stand to the contrary — Moreover, CBEC Circular No. 692/8/2003-CX dated 13-2-2003 requiring the Department to determine the cost of production of captively consumed goods strictly in accordance with CAS-4, held, binding on the Department, (2006) 7 SCC 228