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2005 (3) TMI 513 - AT - Central Excise
Issues:
1. Determination of assessable value of goods captively consumed under Rule 6(b)(i) vs. Rule 6(b)(ii) of Central Excise Valuation Rules, 1975. 2. Applicability of comparable price for determining assessable value. 3. Treatment of comparable price as cum-duty price. 4. Examination of duty computation based on list price of dealers vs. assessable value. 5. Interpretation of rules leading to penalty imposition. The judgment dealt with the issue of determining the assessable value of goods captively consumed by a company under Rule 6(b)(i) as opposed to Rule 6(b)(ii) of the Central Excise Valuation Rules, 1975. The appellant, a tractor component manufacturer, had been paying excise duty based on the cost of manufacture instead of comparable prices. However, following a Supreme Court judgment, they were required to discharge duty liability based on comparable prices available for spare parts. The tribunal emphasized that for goods sent to other units for captive consumption, the assessable value should be determined on the basis of comparable prices under Rule 6(b)(i) if available, rather than the cost of manufacture under Rule 6(b)(ii). Regarding the applicability of comparable prices, the tribunal ruled that since the comparable price of parts sold as spare parts was available, the assessable value had to be determined under Rule 6(b)(i). The tribunal clarified that the duty should be paid on the comparable price, and the concept of treating comparable price as cum-duty price was deemed irrelevant in this context. It was noted that the appellant was clearing the same components in the spare parts market, paying duty based on the assessable value declared by them. The tribunal directed a remand to the original adjudicating authority to examine whether duty had been computed on the list price of dealers or the assessable value at which the goods were sold in the spare parts market by the appellants. This examination was necessary due to the department's alleged use of the list price of dealers instead of the correct assessable value. The tribunal set aside the penalty imposed on the appellants, citing the issue's involvement of interpretation of rules. Ultimately, the appeal was disposed of with these terms, emphasizing the importance of correctly determining assessable value and adhering to the applicable valuation rules in excise matters.
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